Executive Summary

Income Tax

• National Savings Scheme (Amendment) Rules, 2024 – Amendment in Rule 6.
• Section 35(1)(ii) of the income-tax act, 1961, read with rules 5C and 5E of the income-tax rules, 1962 – scientific research expenditure – approved scientific research association/institution
• Section 88 of the Finance Act, 2024 – Direct Tax Vivad se vishwasScheme, 2024 – Notified date of enforcement of said scheme.

Goods And Service Tax (GST)

• Press release recommendations during 54th meeting of GST Council dated 09-09-2024.
• Clarification in respect of Advertising Services provided to foreign clients Circular No. 230/24/2024-GST [F.NO. CBIC-20001/6/2024-GST], dated 10-09-2024.
• Clarification on availability of Input tax credit in respect of DEMO VECHICLES Circular No. 231/25/2024-GST [F. NO. CBIC-20001/6/2024-GST], dated 10-09-2024
• Clarification on Place of Supply of Data Hosting Services provided by service providers located in India to Cloud Computing Service Providers located outside India Circular No. 232/26/2024-GSTL [F.NO. CBIC-20001/6/2024-GST], dated 10-09-2024.
• Clarification regarding Regularization of refund of IGST availed in Contravention of Rule 96(10) OF CGST Rules, 2017, in cases where the exporters had imported certain inputs without payment of Integrated Taxes and compensation Cess Circular No. 233/27/2024-GST [F.NO. CBIC-20001/6/2024-GST], dated 10-09-2024.

Companies Act 2013/ Other Laws

• Notifying the National Bank for Financing Infrastructure and Development as a Public Financial Institution
• Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2024
• Companies (Indian Accounting Standards) Second Amendment Rules, 2024
• Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024
• Launching Company Adjudication (ADJ) Form
• Companies (Prospectus and Allotment of Securities) Amendment Rules, 2024
• Clarification on the holding of Annual General Meeting (AGM) and EGM through Video Conference (VC) or Other Audio Visual Means (OAVM) and passing of Ordinary and Special resolutions by the companies under the Companies Act, 2013 read with Rules made thereunder -Extension of timeline
• Company e-Filing Form IEPF-1
• Liberalized Remittance Scheme (LRS) for Resident Individuals Discontinuation of Reporting of Monthly Return
• Foreign Exchange (Compounding Proceedings) Rules, 2024
• SEBI (Listing Obligations and Disclosure Requirements) Regulations
• SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2024

• • National savings scheme (amendment) rules, 2024 – amendment in rule 6

  In the National Savings Rules, 1992, in rule 6, in sub-rule (1), for clause (v), the following clauses shall be substituted, namely: –

  “(v) For the period commencing from the 1st day of March, 2003 but before 1st day of October, 2024, the interest at the rate of seven-and-a-half per cent per annum shall be allowed for a calendar month on the lowest balance at credit of an account between the close of the tenth day and the end of the month and such interest shall be calculated and credited to the account at the end of each year.

  (vi) The balances at the credit of the subscribers of the National Savings Scheme under these rules, on or after the 1st day of October 2024, shall bear no interest.

  • Section 35(1)(ii) of the Income-Tax Act, 1961, read with rules 5C and 5E of the Income-Tax Rules, 1962 – Scientific Research Expenditure – Approved scientific research association/institution
  • The Central Government approves ‘Advanced Manufacturing Technology Development Centre (PAN: AAEAA9272B), Chennai’ as ‘Other Institution’ under the category of ‘University, College or Other Institution’ for ‘Scientific Research’ for the purposes of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 read with rules 5C and 5E of the Income-tax Rules, 1962.
  • This Notification shall apply with effect from the date of publication in the Official Gazette and accordingly it shall be applicable for Assessment Years 2025-26 to 2029-30.

   

  AND

  • The Central Government hereby approves Auroville Foundation (PAN: AAATA0037B) as ‘Other Institution’ for research in social science or statistical research for the purposes of clause (iii) of sub-section (1) section 35 of the Income-tax Act, 1961 read with rules 5C and 5E of the Income-tax Rules, 1962.

  This Notification shall apply with effect from the date of publication in the Official Gazette (i.e. from the Previous Year 2024-25) and accordingly it shall be applicable for Assessment Years 2025-26 to 2029-30.

• Press release recommendations during 54^th meeting of GST Council dated 09-09-2024.
• The 54th GST Council met under the Chairpersonship of Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman in New Delhi on 09-09-2024.
• The meeting was also attended by Union Minister of State for Finance Shri Pankaj Chaudhary, Chief Ministers of Goa and Meghalaya; Deputy Chief Ministers of Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana; besides Finance Ministers of States & UTs (with legislature) and senior officers of the Ministry of Finance & States/ UTs.
• GST Council recommends Group of Ministers (GoM) on following Services:

1. Life and Health insurance related to GST
2. GoM on Rate Rationalisation and asked to submit report by end of October 2024
3. GST Council also recommends formation of a GoM to study the future of compensation cess
4. GST Council recommends to exempt supply of research and development services by a Government Entity; or a research association, university, college or other institution notified u/s 35 of Income Tax Act using government or private grants.

• The GST Council inter-alia made the following recommendations:

1. Relating to changes in GST tax rates,
2. Provide relief to individuals and,
3. Measures for facilitation of trade and measures for streamlining compliances in GST.
4. Changes/Clarifications in GST Tax Rates: – Goods
5. Namkeens and Extruded/Expanded Savoury food products:

• The GST rate of extruded or expanded products, Savoury or salted (other than un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion), falling under HS 1905 90 30 to be reduced from 18% to 12% at par with namkeens, bhujia, mixture, chabena(prepackaged and labelled) and similar edible preparations in ready for consumption form which are classifiable under HS 2106 90.The GST rate of 5% will continue on un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion.
• To also clarify that the reduced GST rate of 12% on extruded or expanded products, savoury or salted (other than un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion), falling under HS 1905 90 30 is applicable

2. Cancer Drugs:

The GST rate on cancer drugs namely, Trastuzumab Deruxtecan, Osimertinib and Durvalumab to be reduced from 12% to 5%.

3. Metal Scrap:

• Reverse Charge Mechanism (RCM) to be introduced on supply of metal scrap by an unregistered person to registered person provided that the supplier shall take registration as and when it crosses threshold limit and the recipient who is liable to pay under RCM shall pay tax even if supplier is under threshold.
• A TDS of 2% will be applicable on supply of metal scrap by registered person in B2B supply.

4. Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways:

To clarify that Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways would be classified under HSN 8415 attracting a GST rate of 28%.

5. Car and Motor cycle seats:

• To clarify that car seats are classifiable under 9401 and attract a GST rate of 18%.
• GST rate on car seats classifiable under 9401 to be increased from 18% to 28%. This uniform rate of 28% will be applicable prospectively for car seats of motor cars in order to bring parity with seats of motorcycles which already attract a GST rate of 28%.

1. Changes/ Clarifications in GST Tax Rates: – Services
2. Life and Health insurance:

• GST Council recommended to constitute a Group of Ministers (GoM) to holistically look into the issues pertaining to GST on the life insurance and health insurance.
• The GoM members are Bihar, UP, West Bengal, Karnataka, Kerala, Rajasthan, Andhra Pradesh, Meghalaya, Goa, Telangana, Tamil Nadu, Punjab, and Gujarat.
• The GoM is to submit the report by end of October 2024.

2. Transport of passengers by helicopters:

• To notify GST @ 5% on the transport of passengers by helicopters on seat share basis and to regularise the GST for past period on ‘as is where is’ basis.
• To also clarify that the charter of helicopter will continue to attract 18% GST.

3. Flying training courses:

To clarify by way of a circular that the approved flying training courses conducted by DGCA approved Flying Training Organizations (FTOs) are exempt from the levy of GST.

4. Supply of research and development services:

• The GST Council recommended to exempt supply of research and development services by a Government Entity; or a research association, university, college or other institution, notified under clauses (ii) or (iii) of sub-section (1) of section 35 of the Income Tax Act, 1961 using Government or private grants.
• Past demands to be regularised on ‘as is where is’ basis.

5. Preferential Location Charges (PLC):

To clarify that location charges or Preferential Location Charges (PLC) paid along with the consideration for the construction services of residential/commercial/industrial complex before issuance of completion certificate forms part of composite supply where supply of construction services is the main service and PLC is naturally bundled with it and are eligible for same tax treatment as the main supply that is, construction service.

6. Affiliation services:

• To clarify that affiliation services provided by educational boards like CBSE are taxable. However, to exempt affiliation services provided by State/Central educational boards, educational councils and other similarly placed bodies to Government Schools prospectively.
• The issue for the past period between 01.07.2017 to 17.06.2021 to be regularized on ‘as is where is’ basis.
• To clarify by way of circular that the affiliation services provided by universities to their constituent colleges are not covered within the ambit of exemptions provided to educational institutions in the notification No. 12/2017-CT(R) dated 28.06.2017 and GST at the rate of 18% is applicable on the affiliation services provided by the universities.

7. Import of service by Branch Office:

To exempt import of services by an establishment of a foreign airlines company from a related person or any of its establishment outside India, when made without consideration. The council also recommended to regularise the past period on ‘as is where is ‘ basis.

8. Renting of commercial property:

To bring renting of commercial property by unregistered person to a registered person under Reverse Charge Mechanism (RCM) to prevent revenue leakage.

9. Ancillary/intermediate services are provided by GTA:

• To clarify that when ancillary/intermediate services are provided by GTA in the course of transportation of goods by road and GTA also issues consignment note, the service will constitute a composite supply and all such ancillary/intermediate services like loading/unloading, packing/unpacking, transshipment, temporary warehousing etc. will be treated as part of the composite supply.
• If such services are not provided in the course of transportation of goods and invoiced separately, then these services will not be treated as composite supply of transport of goods.

      Other changes:

• To regularize the GST liability for the past period prior to 01.10.2021 on ‘as is where is’ basis, where the film distributor or sub-distributor acts on a principal basis to acquire and distribute films.
• To exempt supply of services such as application fees for providing electricity connection, rental charges against electricity meter, testing fees for meters/ transformers/capacitors, labour charges from customers for shifting of meters/service lines, charges for duplicate bills etc. which are incidental, ancillary or integral to the supply of transmission and distribution of electricity by transmission and distribution utilities to their consumers, when provided as a composite supply.
• GST for the past period to be regularized on ‘as is where is’ basis.

1. Measures for facilitation of trade:
2. Procedure and conditions for waiver of interest or penalty or both, in respect of tax demands under section 73 of CGST Act, 2017 for FYs 2017-18, 2018-19 and 2019-20 as per section 128A of CGST Act, 2017:
   • The GST Council recommended insertion of rule 164 in CGST Rules, 2017, along with certain Forms, providing for the procedure and conditions for availment of benefit of waiver of interest or penalty or both, relating to tax demands under section 73 of CGST Act, pertaining to FYs 2017-18, 2018-19 and 2019-20, as per section 128A of CGST Act.
   • The Council also recommended to notify under sub-section (1) of section 128A of CGST Act, 31-3-2025 as the date on or before which the payment of tax may be made by the registered persons, to avail the said benefit as per section 128A of the CGST Act.
   • The Council also recommended the issuance of a circular to clarify various issues related to availment of waiver of interest or penalty or both as per section 128A of CGST Act.
   • The Council also recommended that section 146 of Finance (No. 2) Act, 2024, which provides for insertion of section 128A in CGST Act, 2017, may be notified with effect from 1-11-2024.
3. Providing a mechanism for implementation of newly inserted sub-section (5) and sub section (6) in section 16 of CGST Act, 2017:

• The GST Council recommended that sections 118 and 150 of the Finance (No. 2) Act, 2024, which provides for insertion of sub-section (5) and sub-section (6) in section 16 of CGST Act, 2017 retrospectively with effect from 1-7-2017, may be notified at the earliest.
• The Council also recommended that a special procedure for rectification of orders may be notified under section 148 of the CGST Act, to be followed by the class of taxable persons, against whom any order under section 73 or section 74 or section 107 or section 108 of the CGST Act has been issued confirming demand for wrong availment of input tax credit on account of contravention of provisions of sub-section (4) of section 16 of the CGST Act, but where such input tax credit is now available as per the provisions of sub-section (5) or subsection (6) of section 16 of the CGST Act, and where appeal against the said order has not been filed.
• The Council also recommended issuance of a circular to clarify the procedure and various issues related to implementation of the said provisions of sub-section (5) and subsection (6) of section 16 of CGST Act, 2017.

3. Amendments in rule 89 and rule 96 of CGST Rules, 2017 and to provide clarification in respect of IGST refunds on exports where benefit of concessional/ exemption notifications specified under rule 96(10) of CGST Rules, 2017 has been availed on the inputs:

• The GST Council recommended to clarify that where the inputs were initially imported without payment of integrated tax and compensation cess by availing benefits under Notification No. 78/2017-Customs, dated 13-10-2017 or Notification No. 79/2017-Customs dated 13-1-2017, but IGST and compensation cess on such imported inputs are subsequently paid, along with applicable interest.
• the Bill of Entry in respect of the import of the said inputs is got reassessed through the jurisdictional Customs authorities to this effect, then the IGST paid on exports, refunded to the said exporter shall not be considered to be in contravention of provisions of sub-rule (10) of rule 96 of CGST Rules.
• Considering the difficulty being faced by the exporters due to restriction in respect of refund on exports, imposed viderule 96(10), rule 89(4A) & rule 89(4B) of CGST Rules, 2017, in cases where benefit of the specified concessional/ exemption notifications is availed on the inputs, the Council recommended to prospectively omit rule 96(10), rule 89(4A) & rule 89(4B) from CGST Rules, 2017. This will simplify and expedite the procedure for refunds in respect of such exports.

4. Issuance of clarifications through the circulars to remove ambiguity and legal disputes in certain issues:

The GST Council recommended issuance of circulars to provide clarity and to remove doubts and ambiguities arising in the following issues due to varied interpretations by the field formations:

1. Clarification on the Place of Supply of advertising services provided by Indian advertising companies to foreign entities.
2. Clarification regarding availability of Input Tax Credit on demo vehicles by the dealers of the vehicle manufacturers.

• Clarification on Place of Supply of data hosting services provided by service providers located in India to cloud computing service providers located outside India.

5. The Council also recommended amendments in some other provisions of CGST Rules, 2017.
6. Other measures:
7. B2C E-invoicing:

• The GST Council recommended roll out of a pilot for B2C e-Invoicing, following the successful implementation of e-invoicing in the B2B sector.
• The Council recognized potential benefits of e-invoicing in retail, such as improved business efficiency, environmentally friendly, cost efficiency to the business, etc.
• It would also provide an opportunity to the retail customers to verify the reporting of the invoice in the GST return. The pilot will be rolled out on voluntary basis in selected Sectors and States.

1. Invoice Management System and new ledgers:

• The Council also took note of the agenda on the enhancements being made to the existing GST return architecture. These enhancements include the introduction of a Reverse Charge Mechanism (RCM) ledger, an Input Tax Credit Reclaim ledger and an Invoice Management System (IMS).
• Taxpayers would be given the opportunity to declare their opening balance for these ledgers by 31st October 2024.
• IMS will allow the taxpayers to accept, reject, or to keep the invoices pending for the purpose of availment of Input Tax Credit. This will be an optional facility for taxpayers to reduce errors in claiming input tax credit and improve reconciliation. This is expected to reduce notices issued on account of ITC mismatch in the returns.
• The recommendations of the GST Council have been presented in this release containing major item of decisions in simple language for information of the stakeholders. The same would be given effect through the relevant circulars/ notifications/ law amendments which alone shall have the force of law.
• Clarification in respect of Advertising Services provided to Foreign Clients

Circular No. 230/24/2024-GST [F.NO. CBIC-20001/6/2024-GST], dated 10-09-2024

• References have been received from the trade and industry requesting for clarification regarding advertising services being provided by Indian advertising companies/agencies to foreign entities, as some of the field formations are considering the place of supply of the said services as within India, thereby denying the export benefits to such advertising companies.
• In view of the difficulties being faced by the trade and industry and to ensure uniformity in the implementation of the provisions of the law across field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies the issues in succeeding paragraphs.

1. Issue in Brief

• A foreign company or firm hires an advertising company/agency in India for advertisement of its goods or services and may enter into a comprehensive agreement with the advertising company/agency encompassing all the issues related to advertising services ranging from media planning, investment planning for the same, creating and designing content, strategizing for maximum customer reach, the identification of media owners, dealing with media owners, procuring media space, etc. for displaying/broadcasting/printing of advertisement including monitoring of the progress of the same. In such a case, the advertising agency provides a one stop solution to the client who outsources the entire activity to the agency.
• In this scenario, media owners raise invoice to the advertising agency for inventory costs, which are then paid by the advertising agency. Subsequently, the advertising agency raises invoice to the foreign client for the rendered advertising services and receives the payments in foreign exchange from the foreign client. In this regard, clarification has been sought as to:

1. Whether the advertising company can be considered as an “intermediary” between the foreign client and the media owners in terms of section 2(13) of Integrated Goods and Services Tax Act, 2017 (herein after referred to as the “IGST Act”), thereby resulting in determination of place of supply under section 13(8)(b) of the IGST Act?
2. Whether the representative of foreign client in India or the target audience of the advertisement in India can be considered as the recipient of the services being supplied by the advertising company under section 2(93) of CGST Act?
3. Whether the advertising services provided by the advertising companies to foreign clients can be considered as performance-based services as per section 13(3)of the IGST Act?
4. Clarification
5. Issue 1 -Whether the advertising company can be considered as an “intermediary” between the foreign client and the media owners as per section 2(13) of IGST Act?

• As per section 2(13) of IGST Act, read with Circular no. 159/15/2021-GST, dated 20-09-2021, a broker, agent or any other person who arranges or facilitates the main supply of goods or services or both or securities and has not involved himself in the main supply on his own account is considered as intermediary.
• In the instant scenario, it is observed that the foreign clients enter into a comprehensive agreement with advertising companies/agencies in India and outsource the entire activity of advertising services to the advertising companies/agencies. Further, these advertising companies/agencies enter into an agreement with the media owners in India for implementing the said media plan and procurement of media space for airing or releasing or printing advertisement
• The advertising agency, in this case, enters into two agreements:

1. With the client located outside India for providing a one stop solution starting from designing the advertisement to its display in the media as agreed to with the client. The advertising company raises invoice to its foreign client for the above advertising services and the payments of the same is received from the foreign client in foreign exchange.
2. With the media company to procure media space for display of the advertisement and to monitor campaign progress based on data shared by the media company. The media company bills the advertising agency and the payment for same is made by the advertising agency to the media company.
3. Thus, the agreement, in the instant case, is in the nature of two distinct principal-to-principal supplies and no agreement of supply of services exists between the Media company and the foreign client. The advertising company is not acting as an agent but has been contracted by the client to procure and provide certain services. The advertising agency is providing the services to the client on its own account.
4. Clarification: In view of above, in the present scenario the advertising company is involved in the main supply of advertising services, including resale of media space, to the foreign client on principal-to-principal basis as detailed above and does not fulfil the criteria of “intermediary” under section 2(13) of the IGST Act. Thus, the same cannot be considered as “intermediary” in such a scenario and accordingly, the place of supply in the instant matter cannot be linked with the location of supplier of services in terms of section 13(8)(b) of the IGST Act.
5. Issue-2 Whether the representative of foreign client in India or the target audience of the advertisement in India can be considered as the “recipient” of the services being supplied by the advertising company under section 2(93) of CGST Act?

• As per Section 2(93)(a) of the CGST Act, the “recipient” of the services means the person who is liable to pay consideration where a consideration is payable for the supply of goods or services or both.
• In the instant scenario, the foreign client is liable to pay the consideration to advertising company for the supply of advertising and not the consumers or the target audience that watches the advertisement in India.
• In this case, even if a representative of the foreign client in India, such as a subsidiary or related person, interacts with the advertising company, the representative cannot be deemed the recipient of the service. If the agreement is between the foreign client and the advertising company, the invoice is issued to the foreign client, and payment is received directly from the foreign client, then the foreign client remains the true recipient of the service.
• Further, the target audience of the advertisements may be based in India but such target audience cannot be considered as recipient of the said advertising services being supplied by the advertising company as per the definition of the recipient under section 2(93) of CGST Act.
• Clarification: In view of above, it is clarified that the recipient of the advertising services provided by the advertising company in such cases is the foreign client and not the Indian representative of the foreign client based in India or the target audience of the advertisements, as per section 2(93) of the CGST Act, 2017.

1. Issue-3 Whether the advertising services provided by the advertising companies to foreign clients can be considered as performance-based services as per section 13(3) of the IGST Act?

• The place of supply of performance-based services is provided in sub-section (3) of section 13 of IGST Act. The provisions of clause (a) of the said sub-section pertain to the services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services.
• However, in the instant matter, there does not appear to be any such involvement of goods which are required to be physically available with supplier of advertising services. Therefore, the said provisions of clause (a) of the said sub-section cannot be made applicable for determination of place of supply of advertising services.
• Further, clause of (b) of sub-section (3) of section 13(3)(b) of IGST Act provides that the place of supply shall be the location where the services are actually performed in case, where,
• services are supplied to an individual,
• represented either as the recipient of services or a person acting on behalf of the recipient, and
• which requires the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services
• In the present scenario, the supply of advertising services does not require physical presence of the recipient (foreign client or representative or a person acting on his behalf) with the advertising company for availing the said advertising services. Thus, the said supply of advertising services cannot be considered as being covered under section 13(3)(b) of the IGST Act for being considered as the services actually performed in India in terms of the said section.
• Clarification: Accordingly, it is clarified that the place of supply of advertising services in such cases can neither be determined as per the provision of section 13(3)(a) nor as per the provisions of section 13(3)(b) of IGST Act.

• Observations:
• Further, it is observed that in the present scenario, the place of supply of the above-mentioned advertising services does not appear to be covered under any other provisions of sub-sections (3) to (13) of Section 13 of the IGST Act.
• Therefore, in view of foregoing discussion, it appears that the place of supply of the said advertising service being supplied by the advertising company to the foreign clients can only be determined as per the default provision, i.e. sub-section (2) of section 13 of IGST Act, e.the place of location of the recipient of the services.
• Since the recipient of the advertising services in such scenario is the foreign client, who is located outside India, the place of supply of the said services appears to be the location of the said foreign client e.outside India as per Section 13(2) of IGST Act, and the said service can be considered to be export of services, subject to the fulfilment of conditions mentioned in section 2(6) of IGST Act

1. In cases where an advertising company in India acts as an agent for a foreign client in securing media space, the contract for media space and ad broadcast is directly between the media owner and the foreign client. The media owner invoices the foreign client and receives payment directly from them. The media services are thus provided directly by the media owner to the foreign client. The advertising company merely facilitates this arrangement and does not provide the media space services itself. The advertising company charges the foreign client only for its facilitation services.

• Consequently, in such cases, the advertising company is an “intermediary” in accordance with Section 2(13) of the CGST Act, 2017, as elucidated in Circular No. 159/15/2021-GST, dated 20.09.2021, in respect of the said services of facilitating the foreign client and accordingly, the place of supply in respect of the said services provided by the advertising company to the foreign client is determinable as per section 13(8)(b) of IGST Act, e.the location of the supplier, i.e. the location of the advertising company.
• It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
• Difficulty, if any, in the implementation of this Circular may be brought to the notice of the Board.
• Clarification on availability of Input tax credit in respect of Demo Vehicles Circular No. 231/25/2024-GST [F. NO. CBIC-20001/6/2024-GST], dated 10-09-2024
• The demo vehicles are the vehicles which the authorized dealers for sale of motor vehicles are required to maintain at their sales outlet as per dealership norms and are used for providing trial run and for demonstrating features of the vehicle to the potential buyers.
• These vehicles are purchased by the authorized dealers from the vehicle manufacturers against tax invoices and are typically reflected as capital assets in books of account of the authorized dealers.
• As per dealership norms, these vehicles may be required to be held by the authorized dealers as demo vehicle for certain mandatory period and may, thereafter, be sold by the dealer at a written down value and applicable tax is payable at that point of time.
• Reference has been received to issue clarification regarding availability of input tax credit in respect of demo vehicles on the following issues:
• Availability of input tax credit on demo vehicles, which are motor vehicles for transportation of passengers having approved seating capacity of not more than 13 persons (including the driver), in terms of clause(a) of section 17(5) of Central Goods & Services Tax Act, 2017 (hereinafter referred to as the ‘CGST Act”).
• Availability of input tax credit on demo vehicles in cases where such vehicles are capitalized in the books of account by the authorized dealers.
• In order to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168(1) of the CGST Act, hereby clarifies the above issues as below.
• Availability of input tax credit on demo vehicles, which are motor vehicles for transportation of passengers having approved seating capacity of not more than 13 persons (including the driver), in terms of clause(a) of section 17(5) of CGST Act.
• Clause (a) of Section 17(5) of CGST Act provides that input tax credit shall not be available in respect of motor vehicles for transportation of persons having approved seating capacity of not more than 13 persons (including the driver), except when they are used for making following taxable supplies, namely:
• further supply of such motor vehicles; or
• transportation of passengers; or
• imparting training on driving such motor vehicles
• The law’s intention, as indicated by the phrase “when they are used for making the following taxable supplies” in section 17(5)(a) of the CGST Act, is to exclude certain cases from the restriction on input tax credit for specified motor vehicles, specifically those used for transporting up to thirteen persons (including the driver). The taxable supplies that are exempt from this input tax credit blockage include the further supply of such motor vehicles, transportation of passengers, and providing driving training for these vehicles.
• As demo vehicles are used by authorized dealers to provide trial run and to demonstrate features of the vehicle to potential buyers, it is quite apparent that demo vehicles cannot be said to be used by the authorized dealer for providing taxable supply of transportation of passengers or imparting training on driving such motor vehicles.

Therefore, demo vehicles are not covered in the exclusions specified in sub-clauses (B) and (C) of clause (a) of section 17(5) of CGST Act. Accordingly, it is to be seen whether or not the Demo vehicles in question can be said to be used for making “further supply of such motor vehicles”, as specified in the sub-clause (A) of the clause (a) of section 17(5) of CGST Act.

• The use of the phrase “such motor vehicles” in section 17(5)(a)(A) of the CGST Act indicates that lawmakers intended to exclude from input tax credit (ITC) blockage not only the motor vehicle being further supplied but also those used for promoting the sale of similar vehicles. Since demo vehicles are used to promote the sale of similar motor vehicles, they can be considered part of the “further supply” of such vehicles. Therefore, ITC on demo vehicles is not blocked under section 17(5)(a) of the CGST Act, as it qualifies for exclusion from the blockage.
• There may be some cases where motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver) are used by an authorized dealer for purposes other than for making further supply of such motor vehicles, say for transportation of its staff employees/ management etc. In such cases, the same cannot be said to be used for making ‘further supply of such motor vehicles’ and therefore, input tax credit in respect of such motor vehicles would not be excluded from blockage in terms of sub-clause (A) of clause (a) of section 17(5) of CGST Act.
• In cases where an authorized dealer acts as an agent or service provider for the vehicle manufacturer, facilitating marketing services such as test drives, and is not involved in direct vehicle sales, the manufacturer issues the sale invoice directly to the customer. The dealer may purchase demo vehicles for test drives and later sell them, charging applicable GST. Since the dealer provides marketing services rather than supplying vehicles on their own account, the demo vehicle is not used for further vehicle supply. Therefore, input tax credit (ITC) on such demo vehicles is blocked under section 17(5)(a) of the CGST Act and is not available to the dealer.
• Availability of input tax credit on demo vehicles in cases where such vehicles are capitalized in the books of account by the authorized dealers.
• As per provisions of section 16(1) of CGST Act, every registered taxpayer is entitled to take input tax credit charged on any supply of goods and services made to him, where such goods or services are used in the course or furtherance of business of such person, subject to such conditions and restrictions as may be prescribed and in the manner which is specified.
• Further, “goods” has been defined in section 2(52) of CGST Act, as,

“Goods” means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply.

• Also, section 2(19) of CGST Act defines “capital goods” as,

“Capital goods” means goods, the value of which is capitalized in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business.

• Demo vehicles used by authorized dealers to promote sales are considered to be used in the course or furtherance of their business. If these vehicles are capitalized in the dealer’s books, they qualify as “capital goods” under section 2(19) of the CGST Act. According to section 16(1) of the CGST Act, the recipient of goods, including capital goods, is entitled to claim input tax credit (ITC) on the tax paid for the inward supply of those goods. Therefore, ITC on demo vehicles remains available, even if the vehicles are capitalized, subject to other provisions of the Act.
• However, it is to be mentioned that in case of capitalization of demo vehicles, availability of input tax credit would be subject to provisions of section 16(3) of CGST Act, which provides that where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed. It is further mentioned that in case demo vehicle, which is capitalized, is subsequently sold by the authorized dealer, the authorized dealer shall have to pay an amount or tax as per provisions of section 18(6) of CGST

Act read with rule 44(6) of the Central Goods and Service Tax Rules, 2017.

• It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
• Difficulty, if any, in the implementation of this Circular may be brought to the notice of the Board.
• Clarification on Place of Supply of Data Hosting Services provided by service providers located in India to Cloud Computing Service Providers located outside India Circular No. 232/26/2024-GSTL [F.NO. CBIC-20001/6/2024-GST], dated 10-09-2024.
• Representations have been received from the trade and industry seeking clarification on the place of supply in case of data hosting services provided by service providers located in India to cloud computing service providers located outside India.
• Issue
• It has been represented that some field formations are of the view that the place of supply of data hosting services provided by the service providers located in India to cloud computing service providers located outside India is the location of data hosting service provider in India and therefore, the benefit of export of services is not available on such supply of data hosting services.
• Thus, clarification has been sought in respect of the following issues-

1. Whether data hosting service provider qualifies as ‘Intermediary’ between the cloud computing service provider and their end customers/users/subscribers as per Section 2(13) of the Integrated Goods and Services Tax Act, 2017 (herein after referred to as the “IGST Act”) and whether the services provided by data hosting service provider to cloud computing service providers are covered as intermediary services and whether the place of supply of the same is to be determined as per section 13(8)(b) of IGST Act
2. Whether the data hosting services are provided in relation to goods “made available” by recipient of services to service provider for supply of such services and whether the place of supply of the same is to be determined as per section 13(3)(a) of the IGST Act
3. Whether the data hosting services are provided directly in relation to “immovable property” and whether the place of supply of the same is to be determined as per section 13(4) of the IGST Act.

• Clarification

1. Whether data hosting service provider qualifies as ‘Intermediary’ between the cloud computing service provider and their end customers/users/subscribers as per Section 2(13) of the IGST Act and whether the services provided by data hosting service provider to cloud computing service providers are covered as intermediary services and whether the place of supply of the same is to be determined as per section 13(8)(b) of IGST Act.

• As per section 2(13) of the IGST Act, read with Circular no. 159/15/2021-GST, dated 20-09-2021, a broker, agent or any other person who arranges or facilitates the main supply of goods or services or both or securities and has not involved himself in the main supply on his own account is considered as ‘intermediary’. Persons who supply goods or services, or both on their own account are not covered in the definition of “intermediary”.
• Cloud computing service providers typically contract with data hosting service providers to use their data centers for hosting services. The data hosting provider, either owning or leasing the premises, manages the infrastructure, human resources, monitoring, IT management, and equipment maintenance. They oversee all aspects of the data center, including rent, hardware, software, power, connectivity, security, and personnel. Importantly, data hosting providers do not interact with or have knowledge of the end users of the cloud computing services.
• Observation:

In this scenario, the data hosting service provider delivers services to the cloud computing provider via a web platform using computing and networking equipment for data storage, processing, and access. The provider operates independently on a principal-to-principal basis, not as a broker or agent between the cloud computing provider and its end users. The cloud computing provider offers services like data storage, AI, machine learning, and analytics to its customers, who access these services online. There is no direct interaction between the data hosting provider and the end users of the cloud computing service.

• Clarification: Accordingly, it is clarified that in such a scenario, the services provided by data hosting service provider to its overseas cloud computing service providers cannot be considered as intermediary services and hence, the place of supply of the same cannot be determined as per section 13(8)(b) of IGST Act.

2017. Whether the data hosting services are provided in relation to goods “made available” by recipient of services to service provider for supply of such services and whether the place of supply of the same is to be determined as per section 13(3)(a) of the IGST Act, 2017.

• Section 13(3)(a) of the IGST Act provides that in cases where the services are supplied in respect of goods which are made physically available by the recipient of services to service provider, the place of supply will be location of service provider.
• Observation: In this scenario, a data hosting service provider independently offers services to overseas cloud computing providers. The service provider manages and maintains the entire data center infrastructure, including hardware, software, cooling systems, power supply, network, and security, all through their personnel. They either own or lease the premises and are solely responsible for its operation. The cloud computing providers pay for these services based on agreements. Since the infrastructure is entirely managed by the data hosting provider, it is not considered owned or physically available to the cloud computing providers.
• Clarification: In view of above, it is clarified that data hosting services provided by data hosting service provider to the said cloud computing service providers cannot be considered in relation to the goods “made available” by the said cloud computing service providers to the data hosting service provider in India and hence, the place of supply of the same cannot be determined under section 13(3)(a) of the IGST Act.
• In cases where the cloud computing service provider supplies some hardware to the data hosting service provider, the latter still manages all aspects of the data center, including premises, software, power, connectivity, security, and maintenance. Therefore, despite using hardware provided by the cloud computing provider, the data hosting services are not considered to be “in relation to” those goods. As a result, the place of supply cannot be determined under section 13(3)(a) of the IGST Act in such cases.

1. Whether the data hosting services are provided directly in relation to “immovable property” and whether the place of supply of the same is to be determined as per section 13(4) of the IGST Act.

• Section 13(4) of the IGST Act provides for the place of supply where services supplied are directly in relation to immovable property.
• Observation: In this scenario, data hosting service providers use either owned or leased premises and manage all necessary infrastructure such as hardware, power supplies, cooling systems, network connectivity, security, and personnel. They also handle operations like server monitoring, IT management, and equipment maintenance. These services are not merely passive or directly related to immovable property but involve a comprehensive range of activities necessary for data hosting. This ensures that cloud computing providers can offer uninterrupted services to their end users, making the data hosting services essential to their operations.
• Clarification: Accordingly, it is clarified that in such a scenario, the data hosting services cannot be considered as the services provided directly in relation to immovable property or physical premises and hence, the place of supply of such services cannot be determined under section 13(4) of IGST Act.
• Further, the place of supply for the data hosting services provided by data hosting service provider located in India to overseas cloud computing service providers does not appear to fit into any of the specific provisions outlined in sections 13(3) to 13(13) of the IGST Act. Therefore, the place of supply in such cases needs to be determined according to the default provision under section 13(2) of the IGST Act, e.the location of the recipient of the services. Where the cloud computing service provider receiving the data hosting services are located outside India, the place of supply will be considered to be outside India according to section 13(2) of the IGST Act.
• Accordingly, supply of data hosting services being provided by a data hosting service provider located in India to an overseas cloud computing entity can be considered as export of services, subject to the fulfilment of the other conditions mentioned in section 2(6) of IGST Act.
• It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
• Difficulty, if any, in the implementation of this Circular may be brought to the notice of the Board.

• Circular No. 233/27/2024-GST [F.NO. CBIC-20001/6/2024-GST] clarification regarding Regularization of refund of IGST availed in Contravention of Rule 96(10) OF CGST Rules, 2017, in cases where the exporters had imported certain inputs without payment of Integrated Taxes and compensation Cess Circular No. 233/27/2024-GST], dated 10-09-2024.
• Sub-rule (10) of rule 96 of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as “CGST Rules”) provides for a bar on availment of the refund of integrated tax (IGST) paid on export of goods or services, if benefits of certain concessional/exemption notifications, as specified in the said sub-rule, have been availed on inputs/raw materials imported or procured domestically.

In this regard, references have been received from the field formations and trade/ industry wherein clarification has been sought on whether refund of integrated tax paid on exports of goods by a registered person can be regularized in a case where the registered person had initially imported inputs without payment of integrated tax and compensation cess, by availing the benefits under Notification No. 78/2017-Customs, dated 13-10-2017 or Notification No. 79/2017-Customs, dated 13-10-2017, but subsequently, at a later date, the said person has either paid the IGST and compensation cess, along with interest, on such imported inputs or is now willing to pay such IGST and compensation cess, along with interest.

• The issue has been examined and in order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies the following:

1. Vide Notification No. 16/2020-CT, dated 23-3-2020, an Explanation was inserted in sub-rule (10) of rule 96 of CGST Rules retrospectively with effect from 23-10-2017, which reads as follows:

“Explanation. – For the purpose of this sub-rule, the benefit of the notifications mentioned therein shall not be considered to have been availed only where the registered person has paid Integrated Goods and Services Tax and Compensation Cess on inputs and has availed exemption of only Basic Customs Duty (BCD) under the said notifications.”

96. The explanation, inserted with retrospective effect, clarifies that if exemption benefits for IGST and compensation cess have not been availed, it will be deemed that the notifications’ benefits were not availed for the purpose of sub-rule (10) of rule 96 of the CGST Rules. This implies that if inputs were initially imported without paying IGST and compensation cess, but these taxes are later paid with interest, it can be considered that the exemption benefits were not availed. Consequently, claiming a refund of IGST on exports with tax payment in such cases would not violate sub-rule (10) of rule 96.
97. In view of the above, it is clarified that where the inputs were initially imported without payment of integrated tax and compensation cess by availing benefits under Notification No. 78/2017-Customs, dated 13-10-2017 or Notification No. 79/2017-Customs, dated 13-10-2017, but subsequently, IGST and compensation cess on such imported inputs are paid at a later date, along with interest, and the Bill of Entry in respect of the import of the said inputs is got reassessed through the jurisdictional Customs authorities to this effect, then the IGST, paid on exports of goods, refunded to the said exporter shall not be considered to be in contravention of provisions of sub-rule (10) of rule 96 of CGST Rules.

• It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
• Difficulty, if any, in implementation of the above instructions may please be brought to the notice of the Board.

• Ministry of Finance (Department of Revenue) (Central Board of Indirect Taxes and Customs) Notification New Delhi, the 27th September, 2024 No. 17/2024–Central Tax

In exercise of the powers conferred by clause (b) of sub-section (2) of section 1 of the Finance (No. 2) Act, 2024 (15 of 2024), the Central Government hereby appoints.—(a)the  date  of  publication  of  this  notification  in  the  Official  Gazette,  as  the  date  on  which  the  provisions  of sections (118, 142, 148 and 150 of the said Act shall come into force; and(b)the 1^st day of November, 2024, as the date on which the provisions of sections (114 to 117, 119 to 141, 143 to 147, 149 and 151 to 157) of the said Act shall come into force.

• Notifying National Bank for Financing Infrastructure and Development as Public Financial Institution

Ministry of Corporate Affairs in consultation with the Reserve Bank of India, hereby notifies National Bank for Financing Infrastructure and Development as a public financial institution. 

• Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2024

The Ministry of Corporate Affairs has notified amendments in Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 wherein Schedule II, Schedule III and Schedule IV are substituted as per the notification. These rules shall be called Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2024 and come into force with immediate effect.

• Companies (Indian Accounting Standards) Second Amendment Rules, 2024

Ministry of Corporate Affairs has notified amendments in Companies (Indian Accounting Standards) Rules, 2015 wherein various new paragraphs has been inserted. These rules shall be called Companies (Indian Accounting Standards) Second Amendment Rules, 2024 and come into force with immediate effect.

• Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024

The Ministry of Corporate Affairs has notified amendments in Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 wherein new sub rule 25A(5) has been inserted as specified therein. These rules shall be called Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024 and come into force from September 17, 2024.

• Launching Company Adjudication (ADJ) Form

The Ministry of Corporate Affairs is launching Company Adjudication (ADJ) form on 16th September 2024 at 12:00 AM and has advised stakeholders to note the following points to facilitate implementation of this form in V3 MCA21 portal:

1. ADJ form on V2 portal will be disabled from 12th September 2024 12:00 AM to 15th September 11:59 pm which is planned for roll-out on 16th September 2024 at 12:00 AM
2. All stakeholders are advised to ensure that there are no SRNs in pending payment and Resubmission status
3. Offline payments in V2 using Pay later option would be stopped from 04th September 12:00 AM
4. V3 portal will not be available for filing of Company/LLP forms on 15th September due to ADJ form roll-out
5. V2 Portal for company filing will remain available for all the forms which are currently in V2 system. Stakeholders may plan accordingly.

• Companies (Prospectus and Allotment of Securities) Amendment Rules, 2024

The Ministry of Corporate Affairs has notified Companies (Prospectus and Allotment of Securities) Amendment Rules, 2024 wherein in Rule 9B (2) a new proviso shall be inserted. These Rules shall come in force on September 20, 2024.

• Clarification on holding of Annual General Meeting (AGM) and EGM through Video Conference (VC) or Other Audio Visual Means (OAVM) and passing of Ordinary and Special resolutions by the companies under the Companies Act, 2013 read with Rules made thereunder -Extension of timeline

The Ministry of Corporate Affairs has issued clarification on holding of Annual General Meeting (AGM) and Extraordinary General Meeting (EGM) through Video Conference (VC) or Other Audio Visual Means (OAVM) and passing of Ordinary and Special resolutions by the companies under the Companies Act, 2013 upto September 30, 2025. It is further clarified that General Circular shall not be construed as conferring any extension of statutory time for holding of AGMs by the companies under the Companies Act, 2013 (the Act) and the companies which have not adhered to the relevant statutory timelines shall be liable to legal action under the appropriate provisions of the Act.

• Company e-Filing Form IEPF-1

The Ministry of Corporate Affairs (MCA) has issued the User Guide for the Procedure to fill the details in the Company e-Filing Form IEPF-1. The objective of Company e-Filing Form IEPF-1 is to make statement of amount credited and transfer of amounts process simplified.

• Liberalised Remittance Scheme (LRS) for Resident Individuals Discontinuation of Reporting of Monthly Return

The Reserve Bank of India has announced that, effective from September 2024, AD Category-I banks will no longer be required to submit the Liberalised Remittance Scheme (LRS) monthly return (Return code: R089). Instead, these banks will need to upload transaction-wise information under the LRS daily return (CIMS return code: R010) by the close of business on the next working day via the CIMS platform (URL: https://sankalan.rbi.org.in). If there are no transactions to report, banks must upload a ‘NIL’ report. Additionally, certain circulars related to the monthly return requirement has been withdrawn.

• Foreign Exchange (Compounding Proceedings) Rules, 2024

The Department of Economic Affairs has issued a notification with respect to Foreign Exchange (Compounding Proceedings) Rules, 2024 read with Foreign Exchange Management Act, 1999 and in supersession of the Foreign Exchange (Compounding Proceedings) Rules, 2000, such rules shall be effective on the date of their publication in the Official Gazette.

• SEBI (Listing Obligations and Disclosure Requirements) Regulations

The National Stock Exchange of India has issued a Circular in respect of Disclosure for utilization of issue proceeds for Listed Entities on NSE EMERGE.This circular shall be applicable with immediate effect and shall not apply to the listed entity wherein the monitoring agency has been appointed.

• SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2024

The Securities and Exchange Board of India has notified amendments in the SEBI (Foreign Venture Capital Investors) Regulations, 2000 wherein various regulations has been subsituted and these regualtions may be called SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2024. They shall come into force from January 01, 2025.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for the period 30.09.2024.

Executive Summary

Income Tax

• CBDT Issues clarification in respect of Income-Tax clearance certificate.
• Section 10(46A) Exemptions – Income arising to a body or authority or Board or trust or Commission, not being a Company.
• Section 10(46) of the Income-Tax Act, 1961 – Exemptions – Statutory body/authority/board/commission – notified body or authority.
• Section 144B – Faceless Assessment – Order under proviso to sub-section (5) of Section 144B specifying circumstances for purposes of enquiries or verification functions by verification Unit.

Goods And Service Tax (GST)

• Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Jammu & Kashmir and West Bengal, dated Aug 2nd, 2024
• Advisory in respect of Changes in GSTR 8, dated Aug 2nd, 2024
• Notification no. 16/2024 – Central Tax [S.O. 3161(E)/F.NO. CBI…Section 1 of the Finance Act, 2024 – short title and commencement – notified date of enforcement of sections 11, 12 and 13 notification no. 16/2024– Central Tax [S.O. 3161(E)/F.NO. CBIC-20006/20/2023-GST], dated 6-8-2024.
• Guidelines for second special all-India drive against fake registrations instruction no. 2/2024-GST [F. NO. CBIC- 20/16/30/2020-GST], dated 12-8-2024
• Circular no. 228/22/2024-GST [F. NO. CBIC-190354/94/2024-TO(TRU-II)-CBEC], dated 15-7-2024 Section 3, read with section 5, of the central goods and services tax act, 2017 – officers under the act – guidelines for CGST field formations in maintaining ease of doing business while engaging in investigation with regular taxpayers – applying para 2(G) of the Instruction No. 1/2023-24-GST (inv.), dated 30-3-2024 in audit matters.
• Instruction no. 3/2024-GST [F. No. GST/INV/INSTRUCTIONS/2023 24], dated 14-8-2024
• Advisory for furnishing bank account details before filing GSTR-1/IFF Notification No. 38/2023 – Central Tax New Delhi, the 4th of August 2023, dated Aug 23rd, 2024
• Introduction of RCM Liability/ITC Statement dated Aug 23rd, 2024

Companies Act 2013/ Other Laws

• Companies (Registration of Foreign Companies) Amendment Rules, 2024 – Amendment in Rules 3
• Limited Liability Partnership (Amendment) Rules, 2024 introduces the Centre for Processing Accelerated Corporate Exit, effective from 27th August 2024.
• Amendment in DIR 3 KYC
• IBBI mandates Registered Valuers to provide a ‘Valuation Report Identification Number’ for each valuation

• SEBI bars stock exchanges/clearing corporations from ties with unregistered security advisors

• SEBI amends Intermediaries Regulations; bars intermediaries from associating with unregistered security advisors

• CBDT Issues clarification in respect of Income-Tax clearance certificate.
• Section 230(1A) of the Income-tax Act, 1961 relates to obtaining of a tax clearance certificate, in certain circumstances, by persons domiciled in India.

In this context, CBDT has specified that the tax clearance certificate under Section 230(1A) of the Act, may be required to be obtained by persons domiciled in India only in the following circumstances –

1. where the person is involved in serious financial irregularities and his presence is necessary in investigation of cases under the Income-tax Act or the Wealth-tax Act and it is likely that a tax demand will be raised against him, or
2. where the person has direct tax arrears exceeding Rs. 10 lakhs outstanding against him which have not been stayed by any authority.

• Further, a person can be asked to obtain a tax clearance certificate only after recording the reasons for the same and after taking approval from the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax.

• Section 10(46A) of the Income Tax Act, 1961 – Exemptions – Income arising to a body or authority or Board or trust or Commission, not being a Company.
• The Finance Act, 2023 inserted clause (46A) in section 10 of the Income-tax Act, 1961 to exempt any income arising to a body or authority or Board or Trust or Commission, not being a company, which has been established or constituted by or under a Central or State Act with one or more of the following purposes, namely: –

1. dealing with and satisfying the need for housing accommodation.
2. planning, development or improvement of cities, towns and villages.
3. regulating, or regulating and developing, any activity for the benefit of the general public, or
4. regulating any matter, for the benefit of the general public, arising out of the object for which it has been created; and

• It has also been provided that such body or authority or Board or Trust or Commission, referred to above is required to be notified by the Central Government in the official Gazette for the purposes of this Clause.
• In order to standardize the manner of filing application u/s 10(46A) of the Act and to avoid procedural delays in processing the same, applicants are advised to file the applications along with requisite enclosures to the Pr. Commissioner/Commissioner of Income-tax/Pr. Director/Director of Income-tax under whose jurisdiction their cases fall.

• Section 10(46) of the Income-Tax Act, 1961 – Exemptions – Statutory body/authority/board/commission – notified body or authority.

In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961)

• The Central Government notifies for the purposes of the above clause, ‘‘West Bengal Transport Workers’ Social Security Scheme’ (PAN AAALW0133G), a a body established by the Government of West Bengal, in respect of the following specified income arising to the said Society, as follows:

1. Amount received in the form of Government grants.
2. Amount received as Cess under the West Bengal Motor Transport Workers’ Welfare Cess Act, 2010 (West Bengal Act V of 2010) and rules framed thereunder.
3. Amount received as registration fees paid by the registered beneficiaries; and
4. Interest earned on bank deposits.

• This notification shall be effective subject to the conditions that West Bengal Transport Workers’ Social Security Scheme –

1. shall not engage in any commercial activity
2. its activities and the nature of the specified income shall remain unchanged throughout the financial year(s); and
3. shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

• This notification shall be applicable from AY 24-25 to AY 25-26.

AND

• The Central Government notifies ‘Unique Identification Authority of India’, (PAN AAAGU0182Q), a statutory Authority established under the provisions of the AADHAAR Act, 2016 by the Government of India, in respect of the following specified income arising to the said Society, as follows:

1. Grants/Subsidies received from Central Government
2. Fees/ Subscriptions including RTI Fee, Tender Fee, Sale of Scrap, PVC card
3. Authentication, Enrolment and Updation service charges received
4. Term/Fixed Deposits; and
5. Interest on bank deposits

• This notification shall be effective subject to the conditions that ‘Unique Identification Authority of India’ –

1. shall not engage in any commercial activity
2. its activities and the nature of the specified income shall remain unchanged throughout the financial years.
3. shall file return of income in accordance with the provision of section 139 of the Income-tax Act, 1961.

• This notification shall be applicable from AY 24-25 to AY 28-29.

AND

• The Central Government notifies ‘Karnataka State Natural Disaster Monitoring Centre’, (PAN: AAATD2434P), a body constituted by the State Government of Karnataka, in respect of the following specified income arising to the said Society, as follows:

1. Grant –in-aid received from State Govt. and Govt. of India,
2. Income received from data sharing activities, and
3. Interest on bank deposits

• This notification shall be effective subject to the conditions that ‘Karnataka State Natural Disaster Monitoring Centre’ –

1. shall not engage in any commercial activity
2. its activities and the nature of the specified income shall remain unchanged throughout the financial years.
3. shall file return of income in accordance with the provision of section 139 of the Income-tax Act, 1961.

• This notification shall be applicable for AY 24-25 to AY 25-26.

• Section 144B of the Income Tax Act, 1961- Faceless Assessment – Order under proviso to sub section (5) of Section 144B – specifying circumstances for purpose of enquiries or verification functions by verification unit.
• In pursuance of the proviso to sub-section (5) of Section 144B of the Income-tax Act, 1961 the Central Board of Direct Taxes hereby specifies the following circumstances, for the purpose of enquiry or verification functions referred to in Section 144B(3)(iii) of the Act by the Verification Unit: –

1. Non-availability of digital footprint in respect of the assessee or any other person.
2. Electronic or Online verification is not possible on account of no response to notice issued to the assessee or any other person.
3. Physical verification of assets or premises or persons is required, regardless of the presence of digital footprint.

• This order shall come into force with immediate effect.

• Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Jammu & Kashmir and West Bengal, (Aug 2nd, 2024) and of Dadra and Nagar Haveli and Daman and Diu AND Chandigarh (Aug 24th, 2024)

1. Rule 8 of the CGST Rules, 2017 has been amended to provide that an applicant can be identified on the common portal, based on data analysis and risk parameters for Biometric-based Aadhaar Authentication and taking a photograph of the applicant along with the verification of the original copy of the documents uploaded with the application.
2. The above-said functionality has been developed by GSTN. It has been rolled out in Jammu & Kashmir and West Bengal on 02nd August 2024 and in Dadra and Nagar Haveli and Daman and Diu AND Chandigarh on 24th August 2024.
3. The said functionality also provides for the document verification and appointment booking process. After the submission of the application in Form GST REG-01, the applicant will receive either of the following links in the e-mail,

(a)   A Link for OTP-based Aadhaar Authentication OR

(b)   A link for booking an appointment with a message to visit a GST Suvidha Kendra (GSK) along with the details of the GSK and jurisdiction, for Biometric-based Aadhaar Authentication and document verification (the intimation e-mail).

4. If the applicant receives the link for OTP-based Aadhaar Authentication as mentioned in point 3(a), she/he can proceed with the application as per the existing process.
5. However, if the applicant receives the link as mentioned in point 3(b), she/he will be required to book the appointment to visit the designated GSK, using the link provided in the e-mail. Once the applicant gets the confirmation of appointment through e-mail, she/he will be able to visit the designated GSK as per the chosen schedule.
6. At the time of the visit to GSK, the applicant is required to carry the following details.

(a)   a copy (hard/soft) of the appointment confirmation e-mail.

(b)   the details of jurisdiction as mentioned in the intimation e-mail.

(c)   Aadhaar Card and PAN Card (Original Copies)

(d)   the original documents that were uploaded with the application, as communicated by the intimation e-mail.

7. The biometric authentication and document verification will be done at the GSK, for all the required individuals as per the GST application Form REG-01.
8. The applicant is required to choose an appointment for the biometric verification during the maximum permissible period for the application as indicated in the intimation e-mail. In such cases, ARNs will be generated once the Biometric-based Aadhaar Authentication process and document verification are completed.
9. The feature of booking an appointment to visit a designated GSK is now available for the applicants of Jammu & Kashmir and West Bengal, Dadra and Nagar Haveli, Daman and Diu AND Chandigarh.
10. The operation days and hours of GSKs will be as per the guidelines provided by the administration in your respective state.

• Advisory in respect of Changes in GSTR 8, Dated (Aug 2nd, 2024)

TCS rate has been reduced from the current 1% (0.5% CGST + 0.5% SGST/UTGST, or 1% IGST) to 0.5% (0.25% CGST + 0.25% SGST/UTGST, or 0.5% IGST) effective from 10/07/2024 vide Notification No. 15/2024 dated 10.07.2024.

Thus, the following important aspects regarding the TCS rates effective from 10.07.2024 are to be noticed:

1.   Period from 1st July to 9th July 2024:

• During this period, the old TCS rate of 1% will continue to apply. Taxpayers are required to collect & report TCS at this rate for all transactions that happened between these dates.

2.   From 10th July 2024 onwards:

• A revised TCS rate of 0.5% will come into effect from 10th July 2024. Taxpayers must ensure their systems and processes are updated to reflect this new rate for all transactions that happened from 10th July forward.

Further, as few taxpayers have reported validation error while filing GSTR-8 for the month of July 2024, it is to inform that GSTN team is working on the changes announced by GST Council in respect of GSTR 8, is expected to be complete in next couple of days, and users would be able to file returns from 06th August 2024 midnight onwards. Any inconvenience caused in this regard is regretted.

• Notification no. 16/2024– Central Tax [S.O. 3161(E)/F.NO. CBI… Section 1 of the finance act, 2024 – short title and commencement – notified date of enforcement of sections 11, 12 and 13 Notification no. 16/2024–Central Tax [S.O. 3161(E)/F.NO. CBIC-20006/20/2023-GST], DATED 6-8-2024

In exercise of the powers conferred by clause (b) of sub-section (2) of section 1 of the Finance Act, 2024 (8 of 2024), the Central Government hereby appoints, —

• the 1st day of October 2024, as the date on which the provisions of section 13 of the said Act shall come into force.
• the 1st day of April 2025, as the date on which the provisions of sections 11 and 12 of the said Act shall come into force.

• Guidelines for second special all-India drive against fake registrations instruction no. 2/2024-GST [F. NO. CBIC- 20/16/30/2020-GST], Dated 12-8-2024

Attention is invited to the Instruction No. 1/2023-GST, dated 4-5-2023 vide which guidelines were issued for conducting a special All-India drive during the period from 16th May, 2023 to 15th July, 2023, for verification and detection of suspicious/ fake registrations and for taking timely remedial action to prevent any further revenue loss to the Government

1. A meeting of the said National Co-ordination Committee held on 11th July 2024 was found quite effective in weeding out fake registrations. The Committee felt that there may be a need for further focused and coordinated action by Central and State tax authorities, therefore, decided that a second special All-India drive against fake registrations may be conducted by all Central and State tax authorities for a period of two months starting from 16th August 2024.

2. In the light of above, in partial modification of the Instruction No. 1/2023-GST, dated 4-5-2023, the following guidelines are issued for such concerted action on suspicious/ fake registrations during the special All-India drive during this year: —
3. Period of Special Drive is from 16th August 2024 to 15th October 2024 to detect suspicious/ fake GSTINs and to conduct requisite verification and further remedial action to weed out these fake billers from the GST eco-system and to safeguard Government revenue.
4. Identification of fraudulent GSTINs.

GSTN, in coordination with Directorate General of Analytics and Risk Management (DGARM), CBIC, will identify suspicious/ high-risk GSTINs, based on detailed data analytics and risk parameters, for the purpose of verification by the State and Central Tax authorities during the said drive and share the details of such suspicious GSTINs, jurisdiction wise, with the concerned tax administration. In case of such suspicious GSTINs falling under the jurisdiction of Central Tax, the details will be shared with the Central Tax authorities by GSTN through DGARM. Besides, the State and Central Tax Authorities, may, at their own option, supplement this list by data analysis/ intelligence gathering at their end, using various available analytical tools like BIFA/ GAIN, ADVAIT, NIC Prime, E-Way Bill Analytics etc., as well as through human intelligence, modus operandi alerts, experience gained through the past detections, as well as the first special All-India drive.

• Action to be taken by field formations:

1. Upon receiving data from GSTN, jurisdictional tax officers are required to promptly verify the suspicious GSTINs. If the verification confirms that the taxpayer is non-existent or fictitious, the officers must swiftly proceed with suspending and canceling the taxpayer’s registration in accordance with the provisions of section 29 of CGST Act, read with the rules thereof.
2. Further, the matter may also be examined for blocking of input tax credit in Electronic Credit Ledger as per the provisions of Rule 86A of CGST Rules without any delay. Additionally, the details of the recipients to whom the input tax credit has been passed by such non-existent taxpayer may be identified through the details furnished in FORM GSTR-1 by the said taxpayer.

• Where the recipient GSTIN pertains to the jurisdiction of the said tax authority itself, suitable action may be initiated for demand and recovery of the input tax credit wrongly availed by such recipient on the basis of invoice issued by the said non-existent supplier, without underlying supply of goods or services or both.

1. In cases where the recipient GSTIN pertains to a different tax jurisdiction, the details of the case including the details of the recipient GSTIN, along with the relevant documents/ evidence, may be sent to the concerned tax authority, as early as possible, in the format mentioned in Annexure-B. For sharing such details/ information and coordination with other tax authorities, GSTN Back Office has an online functionality, ‘Initiate Enquiry’ in the Enforcement module, which is available to all tax officers who have been assigned the role of ‘Enforcement Officer’ on the Back Office (BO Portal).
2. For the purpose of communicating this information to the recipient tax jurisdiction, a nodal officer shall be appointed immediately by each of the Zonal CGST Zone and State. The name, designation, phone number/ mobile number and E-mail Id of such Nodal officer(s) appointed by CGST Zones and States must be shared by the concerned tax authority with GST Council Secretariat within three days of issuance of this letter. GST Council Secretariat will compile the list of the Nodal officers after procuring the details from all the tax administrations and will make the compiled list available to all the tax jurisdictions and to GSTN.
3. The nodal officer of the tax jurisdictions may be assigned the role of ‘Enforcement Officer’ on the BO Portal. Wherever the details of the recipient GSTIN needs to be shared to other tax jurisdiction, the same may be done through the nodal officer. The said nodal officer will accordingly share the information about the recipient GSTIN with the nodal officer of the concerned recipient tax administration, through the said functionality, attaching a pdf document in the format mentioned in Annexure-B. The nodal officer of the recipient tax administration will further share the details with the concerned jurisdictional tax officers, for necessary action.

• GSTN will issue detailed guidelines/ advisory regarding usage of this functionality, which may be referred to.
• Action may also be taken to identify the masterminds/ beneficiaries behind such fake GSTIN for further action, wherever required, and also for recovery of Government dues and/ or provisional attachment of property/ bank accounts, etc. as per provisions of section 83 of CGST Act. Further, during the investigation/ verification, if any linked suspicious GSTIN is detected, similar action may be taken/ initiated in respect of the same.

• Feedback and Reporting Mechanism:

1. An action-taken report in the format enclosed as Annexure-A and Annexure-A1 will be uploaded by each of the State as well as CGST Zones, through the nodal officer referred to in para 2(c)(v), on the portal provided for the same, on a weekly basis on the first working day after completion of the week, for enabling the GST Council Secretariat to monitor the same.
2. If any novel modus operandi is detected during the verification/ investigation, the same may also be indicated in the said action taken report. On conclusion of the drive, GSTIN-wise feedback on the result of verification of the suspicious GSTINs shared by GSTN, will be provided by the field formations through the nodal officer to GSTN, as per the format enclosed in Annexure-C.

3. The Principal Chief Commissioner/ Chief Commissioner of the Central GST Zones and the Chief Commissioner/ Commissioner of the States/ UTs may monitor the progress of action taken in respect of list of suspicious GSTINs received from GSTN and chosen locally. The action taken in respect of the GSTINs received from other tax administrations through the ‘Initiate Enquiry’ module may also be monitored.

4. GST Council Secretariat will compile the reports received from various formations and make it available to the National Coordination Committee immediately. The unique modus operandi found during this special drive will be compiled by GST Council Secretariat and presented before National Coordination Committee, which will be subsequently shared with Central and State Tax administrations across the country.

5. Difficulties, if any, in the implementation of these instructions may be brought to the notice of the Board.

• Circular no. 228/22/2024-GST [F. NO. CBIC-190354/94/2024-TO(TRU-II)-CBEC], DATED 15-7-2024 Section 3, read with section 5, of the central goods and services tax act, 2017 – officers under the act – Guidelines for CGST field formations in maintaining ease of doing business while engaging in investigation with regular taxpayers – applying para 2(G) of the instruction no. 1/2023-24-GST (INV.), Dated 30-3-2024 in audit matters instruction no. 3/2024-GST [F.NO. GST/INV/INSTRUCTIONS/2023 24], Dated 14-8-2024

“The scenario may arise in a CGST Zone where an issue investigated by one of the (Pr.) Commissioners is based on an interpretation of CGST Act/Rules, notifications, circulars etc., and it is in the direction of proposing non-payment or short payment of tax, however, the background is that the taxpayer(s) is/are following, or have followed, a prevalent trade practice based on particular interpretation on that issue in the sector/industry. This scenario results in more than one interpretation and likelihood of litigation, change in practice etc.

In such cases, it is desirable that the zonal (Pr.) Chief Commissioner make a self-contained reference to the relevant policy wing of the Board i.e. the GST Policy or TRU. The endeavor, to make such reference before concluding investigation, and as much in advance, as is feasible, of the earliest due date for issuing of show cause notice, may be useful in promoting uniformity or avoiding litigation if the matter, after being processed, is amongst those that also gets placed before the GST Council.”

The Board desires that during the process of audit, wherever the relevant CGST Audit (Pr.) Commissioner comes across the scenario described above, the Zonal (Pr.) Chief Commissioner should follow the procedure and endeavor prescribed by Board in para 2(G) of above Instruction. This applies also to on-going audit proceedings.

• Advisory for furnishing bank account details before filing GSTR-1/IFF Notification No. 38/2023 – Central Tax New Delhi, the 4th of August 2023, Dated Aug 23rd, 2024

1. As per Rule 10A of Central Goods and Services Tax Rules, 2017 notified vide notification no. 31/2019 dated 28.06.2019, a taxpayer is required to furnish details of a valid Bank Account within a period of 30 days from the date of grant of registration, or before furnishing the details of outward supplies of goods or services or both in FORM GSTR-1or using Invoice Furnishing Facility (IFF), whichever is earlier.
2. Now, from 1st September 2024 this rule is being enforced. Therefore, for the Tax period August-2024 onwards, the taxpayer will not be able furnish GSTR-01/IFF as the case may be, without furnishing the details of a valid Bank Account in their registration details on GST Portal.
3. Therefore, all the taxpayers who have not yet furnished the details of a valid Bank Account details are hereby requested to add their bank account information in their registration details by visiting Services > Registration > Amendment of Registration Non – Core Fields tabs on GST Portal.
4. It is informed that in absence of a valid bank account details in GST registration, you will not be able to file GSTR-1 or IFF as the case may, be from August-2024 return period.

• Introduction of RCM Liability/ITC Statement Dated Aug 23rd, 2024

To assist taxpayers in correctly reporting Reverse Charge Mechanism (RCM) transactions, a new statement called “RCM Liability/ITC Statement” has been introduced on the GST Portal. This statement will enhance accuracy and transparency for RCM transactions by capturing the RCM liability shown in Table 3.1(d) of GSTR-3B and its corresponding ITC claimed in Table 4A (2) and 4A (3) of GSTR-3B for a return period. This statement will be applicable from tax period August 2024 onwards for monthly filers and from the quarter, July-September-2024 period for quarterly filers.

The RCM Liability/ITC Statement can be accessed using the navigation: Services >> Ledger >> RCM Liability/ITC Statement.

• Reporting Opening Balance in RCM ITC Statement.
• RCM ITC opening balance can be reported by following below navigation:

Login >> Report RCM ITC Opening Balance or Services >> Ledger >> RCM Liability/ITC Statement >> Report RCM ITC Opening Balance

• In case the taxpayers have already paid excess RCM liabilities by declaring the same in Table 3.1(d) of GSTR-3B however he hasn’t availed corresponding ITC through Table 4(A)2 or 4(A)3 of GSTR-3B, due to any reason, in such cases taxpayer need to fill Positive value of such excess paid liability as RCM ITC as opening balance in RCM statement.
• In case the taxpayers have already availed excess RCM ITC through Table in Table 4(A)2 or 4(A)3 of GSTR-3B however he hasn’t paid corresponding liability by declaring the same in table 3.1(d) of GSTR-3B, in such cases taxpayer will be needed to fill a negative value of such excess claimed ITC as RCM as opening balance in RCM Statement.
• In case taxpayer need to reclaim the RCM ITC, which was reversed in earlier tax periods through Table 4(B)2 of GSTR-3B, if eligible, he can reclaim such RCM ITC in Table 4A ­(5) of GSTR-3B. Please note that such RCM ITC shall not be reclaimed through Table 4(A)2 and 4(A)3 of GSTR-3B. Such RCM ITC reversal need not to be reported as RCM ITC opening balance.

For Opening Balance pls reconcile till tax Period:

• Monthly filers: Report the opening balance considering RCM ITC till the July-2024 return period.
• Quarterly filers: Report the opening balance up to Q1 of FY 2024-25, considering RCM ITC till the April-June 2024 return period.
• Deadline to declare Opening Balance: Opening balance can be declared till 31.10.2024.
• Amendments in Opening Balance: Taxpayers can rectify any errors committed while declaring the opening balance on or before 30.11.2024, he shall be provided three opportunities for the same.

This amendment facility shall be discontinued after 30.11.2024.

• Companies (registration of foreign companies) amendment rules, 2024 – amendment in rules 3

The Ministry of Corporate Affairs (MCA) issued a notification on 12th August 2024 amending Rule 3 and Rule 8 of the Companies (Registration of Foreign Companies) Rules. These amendments will come into effect from 9th September 2024. Below is a summary of the key changes:

1. Rule 3 sub-rule (3) – A foreign company shall, within a period of thirty days of the establishment of its place of business in India, file with the Registrar, Central Registration Centre in Form FC-1, accompanied by a fee and documents as provided in Section 380 of Companies (Registration offices and Fees) Rules, 2014.

2. Rule 8 sub-rule (1) – Any document which any foreign company is required to deliver to the Registrar shall be delivered to the Registrar having jurisdiction over New Delhi, and references to the Registrar in chapter XXII of the act, i.e., Companies Incorporated outside India, and these rules shall be constructed accordingly.

• Limited Liability Partnership (Amendment) Rules, 2024 introduces the Centre for Processing Accelerated Corporate Exit, effective from 27th August 2024.

On August 5, 2024, the Ministry of Corporate Affairs issued a notification amending the Limited Liability Partnership Rules, 2009, under the Limited Liability Partnership Act, 2008. The Limited Liability Partnership (Amendment) Rules, 2024, effective from August 27, 2024, incorporate several changes, particularly to rule 37. The amendments include the introduction of the Centre for Processing Accelerated Corporate Exit, established under a notification dated March 17, 2023. This Centre is now mentioned alongside the Registrar in various sub-rules, specifically in clauses and provisions related to the accelerated exit process of LLPs. The explanation added to sub-rule (1) clarifies the definition and establishment of this Centre. These changes aim to streamline and expedite the corporate exit procedures for LLPs. (Filings under section 124 and section 125 of the Companies Act).

• Amendment in DIR 3 KYC

The Ministry of Corporate Affairs (MCA) has recently issued a notification on 16th July 2024 regarding amendments to the DIR-3 KYC requirements, effective from August 1, 2024, and notified Companies (Appointment and qualification of Directors) Amendment Rules, 2024. This amendment impacts how Directors Identification Number (DIN) holders can update their email IDs and mobile numbers under the Companies Act, 2013.

Impact of Amendment: If a Din holder wants to change their email ID or mobile number at any time during the financial year, there are two options:

1. If they want to make amendments after April 1st until September 30th, they can do so by filing the DIR-3 KYC (without any fees).
2. If they are making amendments after September 30 or after filing DIR-3 KYC once for that year, then they need to file DIR-3 KYC again along with fees of Rs. 500/-

• IBBI mandates Registered Valuers to provide a ‘Valuation Report Identification Number’ for each valuation

The Insolvency and Bankruptcy Board of India (IBBI) has issued a circular mandating the generation of a Valuation Report Identification Number (VRIN) for each valuation report prepared by Registered Valuers (RVs) or Registered Valuers Entities (RVEs) under the Insolvency and Bankruptcy Code, 2016. This measure aims to ensure the authenticity and traceability of valuation reports.

• SEBI bars stock exchanges/clearing corporations from ties with unregistered security advisors

SEBI has notified the Securities Contracts (Regulation) (Stock Exchange and Clearing Corporations) (Fourth Amendment) Regulations, 2024. A new chapter, VIA, regarding restrictions on dealing with unregulated entities has been introduced. It states that no recognised stock exchange or clearing corporation or their agent must have any association with another person who provides advice or any recommendation in respect of security unless the person is registered with or permitted by the Board.

• SEBI amends Intermediaries Regulations; bars intermediaries from associating with unregistered security advisors

SEBI has notified SEBI (Intermediaries) (Amendment) Regulations, 2024. A new chapter, IIIA, regarding restrictions on dealing with other entities has been introduced. It states that a person regulated by the Board or agent of such a person must not have any direct or indirect association with another person who provides advice or recommendation directly or indirectly in respect of a security unless a person is registered with or permitted by the Board to provide such advice or recommendation.

• Appointed date for SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2022

According to new modifications, the pre-open session for IPOs will be for a duration of 60 minutes i.e, from 9-10 am, out of which 45 minutes will be allowed for order entry, order modification and order cancellation and 10 minutes for order matching and trade confirmation.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for    the period 31.08.2024.

Newsletter Aug 2024

Executive Summary

Income Tax

• Section 10 (23FE) of the income-tax act, 1961 – exemption – income of specified person from an investment made in India – specified sovereign wealth fund.
• Section 10(46) of the Income-Tax Act, 1961 – Exemptions – Statutory body/authority/board/commission – notified body or authority
• Amendment as per Union Budget 2024 presented on July 23, 2024.

Goods And Service Tax (GST)

• Refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports
• Integrated Services from NIC-IRP e-invoice-1 and e-invoice-2 Portals
• Refund of tax paid on Inward supply of goods by Canteen Store Department (FORM – GST RFD 10A)
• Circular no. 228/22/2024 dated 15-7-2024 (Section 9 of the Central Goods and Services Tax Act, 2017 – levy and collection – clarifications regarding applicability of GST on certain services
• Circular no. 229/23/2024 dated 15-7-2024 (Section 9 of the Central Goods and Services Tax Act, 2017 – levy and collection – clarification regarding GST rates and classification (goods).
• Notification no. 3/2024, dated 12-7-2024 – Central Tax (rate) (Section 11 of the Central Goods and Services Tax Act, 2017 – Power to grant exemption from tax – list of CGST exempt goods (nil rated goods)
• Notification no. 14/2024, dated 10-7-2024 – Central Tax (Section 44 of the Central Goods and Services Tax Act, 2017 – Annual Return – Exemption to registered person from filing annual return whose aggregate turnover in the Financial Year 2023-24 is up to 2 crores
• Notification no. 15/2024- Central Tax, dated 10-7-2024 section 52 of the Central Goods and Services Tax Act, 2017 – Collection of tax at source – electronic commerce operator to collect 0.25 per cent of net value of intra-state taxable supplies made through it where consideration with respect to such supplies is collected by said operator.
• Notification no. 4/2024, dated 12-07-2024- Central Tax (rate) (Section 11 of the Central Goods and Services Tax Act, 2017 – Power to grant exemption from tax – CGST exempt services (nil rated services)

Companies Act 2013/ Other Laws

• Companies (Significant Beneficial Owners) Amendment Rules, 2024
• (Companies (Management and Administration) Amendment Rules, 2024)
• (Filings under section 124 and section 125 of the Companies Act)
• Companies (Appointment and Qualification of Directors) (Amendment) Rules, 2024.
• Companies Nidhi (Amendment) Rules, 2024
• SEBI amends AIF Regulations, 2012; introduces norms for ‘Migrated Venture Capital Funds
• Appointed Date for SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2022

• Section 10 (23FE) of the income-tax act, 1961 – exemption – income of specified person from an investment made in India – specified sovereign wealth fund.
• Sedction 10(23FE) provides an exemption to sovereign wealth funds and pension funds (specified fund) on their income like dividend, interest, and long-term capital gains arising from investment in infrastructure in India made between 01.04.2020 and 31.03.2024 subject to fulfillment of certain conditions.
• Through Notification dated 18-7-2024, 31^st March 2024 has been substituted with 31^st March 2025.

AND

• The Central Government through Notification No. 93/2024/F. NO. 500/PF12/S10(23FE) FT&TR-II-PART (1), specify the pension fund, namely, AIMCo India Infrastructure Limited as the specified person for the purposes of the said clause in respect of the eligible investment made by it in India on or after the date of publication of this notification in the Official Gazette but on or before the 31st day of March, 2025 subject to the conditions.
• Violation of any of the conditions shall render the assessee ineligible for the tax exemption.
• This notification shall come into force from the date of its publication in the Official Gazette.
• Section 10(46) of the Income-Tax Act, 1961 – Exemptions – Statutory body/authority/board/commission – notified body or authority
• The Central Government notifies ‘Punjab Skill Development Mission Society, Chandigarh’, a Society constituted by Government of Punjab, in respect of the following specified income arising to the said Society, as follows:

1. Grants and contributions received from Central Government, State Government of Punjab, and other Government institutions
2. CSR funds received from companies/firms.
3. Levy of service charges or administrative charges for the schemes/projects.
4. Interest on bank deposits.

• This notification shall be effective subject to the conditions that Punjab Skill Development Mission Society, Chandigarh –

1. shall not engage in any commercial activity
2. its activities and the nature of the specified income shall remain unchanged throughout the financial years.
3. shall file return of income in accordance with the provision of section 139 of the Income-tax Act, 1961.

• This notification shall be deemed to be applicable for AY 21-22 to AY 23-24.

AND

• The Central Government notifies ‘ Society for Applied Microwave Electronics Engineering & Research (SAMEER)’, a Society constituted by Central Government, in respect of the following specified income arising to the said Society, as follows:

1. Grants received from Ministry of Electronics and Information Technology
2. Fees received from test measurement and consultancy services.
3. Design and development charges for systems/subsystems in RF/Microwave and allied areas.
4. Revenue from Royalty and transfer of technology.
5. Miscellaneous income as per Memorandum of Association of the SAMEER
6. Interest on bank deposits.

• This notification shall be effective subject to the conditions that Society for Applied Microwave Electronics Engineering & Research (SAMEER), Mumbai –

1. shall not engage in any commercial activity
2. its activities and the nature of the specified income shall remain unchanged throughout the financial years.
3. shall file return of income in accordance with the provision of section 139 of the Income-tax Act, 1961.

• This notification shall be deemed to be applicable for AY 21-22 to AY 24-25.
• Amendment in Union Budget
• Amendment u/s 115BAC –

The proposed slab as per new regime u/s 115BAC is:

• Additionally, Standard deduction has been increased from Rs. 50,000 to Rs. 75,000 along with family pension will be also allowed. The family pension amount has been amended from Rs. 15,000 to Rs. 20,000.
• Deduction u/s 80CCD (2) – In case of employee other than Government employee, the contribution rate has been increased to 14% from 10% of employee’s salary.

This is being increased only in the case where the employee’s salary is chargeable to tax under sub-section (1A) of section 115BAC of the Act.

• Amendment for Foreign Companies –

It is proposed to reduce the tax rate from 40% to 35%. The surcharge and Health and Education Cess will remain same.

• Amendment in TDS/TCS:

It is proposed to reduce the TDS rate for the following sections:

• Section 192(B) – Salary

The amendment has been proposed that while computing the TDS deducted by an employer on salary income, the employer shall consider the TCS collected, subject to certain conditions. This amendment shall be applicable from 01.10.2024.

• Section 194IA – Transfer of Immovable Property

It is proposed to amend the sub section (2) of the section 194-IA of the Act to clarify that where there is more than one transferor or transferee in respect of an immovable property then such consideration shall be the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property. This amendment shall be applicable from 01.10.2024.

• Excluding sums paid under section 194J from section 194C (Payments to Contractors)
• Clause (iv) of the Explanation of section 194C defines “work” to specify which all activities would attract TDS under section 194C
• There is no explicit exclusion of assessee who are required to deduct tax under section 194J from requirement or ability to deduct tax under section 194C of the Act
• It is proposed to explicitly state that any sum referred to in sub-section (1) of section 194J does not constitute “work” for the purposes of TDS under section 194C.
• The amendment shall be applicable from 01.10.2024.
• Increase in the Interest Rate (TCS) – Delay in payment of TCS to government.

It is proposed to increase the interest rate from 1% to 1.5% for every month or part thereof on the amount of TCS from the date such amount collected to the date tax is actually paid.

• TCS on notified goods (Luxury goods specified by Central Government)

It is proposed to levy TCS u/s 206C(1F) on notified goods of value exceeding Rs. 10 lacs. It will be applicable from 01.01.2025.

• Filing of correction statement in case of TDS/TCS

TDS/TCS correction statements cannot be filed beyond 6 years after the end of the financial year in which the original statements under section 200 and section 206C were filed.

• Amendment in Capital Gain:

The Indexation has been removed in case of Long-Term Capital Gain from 23 July 2024

• Holding Period: There will be only two holding periods, 12 months and 24 months, for determining whether the capital gain is short term capital gain or long- term capital gain.

• Section 47: Any gift paid by the company will be subject to Capital Gain Tax. This shall be applied to Assessment year 2025-26 and subsequent years.
• Amendment in Section 37

Any expenditure incurred to settle proceedings related to legal contraventions, as notified by the Central Government, shall not be allowed as deduction u/s 37.

• Amendment in Section 40(b): Remuneration to partner

• Amendment in Section 94B(b): (Restriction on deduction of Interest expense in respect of any debt issued by non-resident, being an associate enterprise of the Borrower).

It is now proposed that the provision of this section shall not apply to finance companies located in IFSC as defined under IFSCA Regulation, 2021, which satisfy such conditions and carry on such activities as may be prescribed. This amendment shall be effective in relation to Assessment Year 2025-26 and subsequent assessment year.

• Amendment: Buyback of shares

In Budget 2024, it is proposed that sum paid by domestic company for purchase of its own shares shall be treated as dividend in the hands of shareholder, who received payment from such buy-back of shares and shall be charged to income-tax at applicable rates. No deduction for expenses shall be available against such dividend income while determining the income from other sources.

The Cost of acquisition of the shares which have been bought back would generate a capital loss in the hands of the shareholder as these assets have been extinguished. Therefore, when the shareholder has any other capital gain from the sale of shares or otherwise subsequently, he would be entitled to claim his original cost of acquisition of all the shares.

• Refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports

GST Council has approved that application of refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports may also be processed by Tax Administration.

Accordingly, Notification No. 12/2024 Central Tax dt. 10 July 2024 has also been issued. GSTN is in the process of development of a separate category of refund application in FORM GST RFD-01, for filing an application of refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports.

However, till the time such separate category for claiming refund of additional amount of IGST paid is developed on the common portal, such exporter(s) may claim refund of the additional IGST by filing an application of refund in FORM GST RFD-01 under the category “Any other” with remarks “Refund of additional IGST paid on account of increase in price subsequent to export of goods” and uploading of Statement 9A & 9B (Refer to Notification No. 12/2024-Central Tax dt. 10 July 2024) along with the relevant documents as specified in the Circular 226/20/2024-GST dated. 11.07.2024.

The Refund application filed under this category will be processed by the officer based on the documentary proof submitted by the refund applicant. The list of documents which are required to be accompanied with the refund claim are also mentioned in Para 6 of the said Circular.

• Integrated Services from NIC-IRP e-invoice-1 and e-invoice-2 Portals

GSTN wish to inform that NIC is releasing the integrated services from e-invoice-1 and e-invoice-2 portals on 18 July 2024 on sandbox portals and 01 Aug 2024 on the production portals. These portals run in parallel and now allow for seamless inter-operations. The highlights of the portal are as follows:

1. Both the portals (NIC-IRP 1 & 2) provide the web and API modes for e-invoice related services.
2. The taxpayers can use the same login credentials to operate e-invoice1 and e-invoice-2 portals.

• In the case of API, the same token can be used for the services of e-invoices and e-waybills on both the portals.

1. The taxpayers can use the e-invoice-2 portal during technical glitches in e-invoice main portal or any other exigencies.
2. The Criss-Cross operations of printing, downloading and cancelling can be carried out on these portals. That is, printing, downloading and cancelling of e-invoices of portal 1 can be done at portal 2 and vice versa.
3. In case e-invoice-1 is non-operational because of technical reasons, then the e-invoice-2 portal can be used for all the services of the e-invoices.

• Please visit the sandbox portal (einv-apisandbox.nic.in) for URLs of APIs and other details.
• Please test all the APIs in the sandbox environment before rolling on the production environment.

1. In addition to NIC-IRP, four other e-invoice portals are operated for the convenience of the taxpayer. The users can avail similar e-invoicing services on IRP-3/IRP-4/IRP-5 and IRP-6 portals also.

• Refund of tax paid on Inward supply of goods by Canteen Store Department (FORM – GST RFD 10A)

In reference to Circular No. 227/21/2024-GST issued by GST policy wing, CBIC on 11 July for online processing of refund applications filed by Canteen Stores Department (CSD), GSTN has developed an online functionality to enable CSDs to file an application for refund in FORM GST RFD-10A in GST common portal.

The pre-requisites & relevant date for filing refund application under this category are mentioned in Para 4, 5 & 6 of the said Circular. The applicants are advised to refer to the same for details in this regard.

The process to be followed for filing refund application under the said category is as below:

1. Login into the GST portal. Click on Services -> Refund -> Application for Refund.
2. Select “Refund of tax paid on Inward supply of goods by Canteen Store Department (CSD)”.
3. Select Period for which refund is to be applied, by selecting from & To Period and then clicking on “Create Refund” application.
4. The refund applications on GST portal are to be filed sequentially with respect to tax periods. If there is no refund to be claimed for a particular period, CSD needs to file a NIL refund claim for that period. Once a refund is filed or NIL refund claim is filed for a particular period, the system will not allow filing for the same period again. Similarly, it will not allow the taxpayer to file for any previous periods.
5. In the GST portal, the Select Period is available from July 2017. If a taxpayer has already filed manual refund claims for the earlier periods or no refund claim is required to be filed for the earlier periods, they are advised to file NIL refund claim for such earlier periods.
6. The details of invoices for which a refund is to be claimed shall be uploaded in the Statement. After successful validation of the statement, click on the Proceed button.
7. The total tax paid on Inward supply of goods will be auto populated. Enter the value of IGST, CGST and SGST in “Total Refund applied for” table.
8. While filing refund application, the applicant has to Select the “Bank Account number” in which the refund is to be disbursed.
9. Before submitting the refund application, the applicant can Save & Preview the refund application. If any correction/addition or rectification is to be done in the refund application, it can be done only before submission. Once the application is submitted using the Submit button, the system will not allow any change in the refund application.

• Circular no. 228/22/2024 dated 15-7-2024 (Section 9 of the Central Goods and Services Tax Act, 2017 – levy and collection – clarifications regarding applicability of GST on certain services

In exercise of the powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017 and on the recommendations of the 53rd GST Council in its meeting held on 22 June 2024, at New Delhi, clarifications, related to the following issues are being issued through this circular: —

1. GST exemption on the outward supplies made by the Ministry of Railways (Indian Railways).
2. GST exemption on the transactions between Special Purpose Vehicles (SPVs) and Ministry of Railways (Indian Railways).

• Applicability of GST on the statutory collections made by the Real Estate Regulatory Authority (RERA) in accordance with the Real Estate (Regulation and Development) Act, 2016.

1. Applicability of GST on the incentive amount shared by acquiring bank with other stakeholders in the digital payment ecosystem under the notified Incentive Scheme for promotion of Ru Pay with Debit Cards and low value BHIM-UPI transactions.
2. GST liability on the reinsurance of specified general and life insurance schemes.
3. GST liability on the reinsurance of insurance schemes for which total premium is paid by the Government.

• Applicability of GST on retrocession services.
• GST Liability on certain accommodation services.

• Circular no. 229/23/2024 dated 15-7-2024 (Section 9 of the Central Goods and Services Tax Act, 2017 – levy and collection – clarification regarding GST rates and classification (goods).

Based on the recommendations of the GST Council in its 53rd meeting held on 22nd June 2024, at New Delhi, in exercise of the powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017, clarifications on the following issues are being issued through this Circular as under: —

Clarification regarding GST rate on Solar Cookers:

1. Representations have been received seeking clarification regarding appropriate classification and applicable GST rate on supply of solar cookers that work on dual energy source.
2. On the recommendations of GST Council, it is hereby clarified that solar cookers that work on dual energy of solar energy and grid electricity are appropriately classifiable under heading 8516 and already attract a GST rate of 12% vide SI. No. 201A of Schedule II of Notification No. 1/2017-Central Tax (Rate) dated the 28th of June 2017.

Clarification regarding GST rate on Fire Water Sprinklers:

1. Representations have been received seeking clarification as to whether the existing entry covering sprinkles at 12% GST rate also cover Fire Water Sprinklers.
2. On the recommendations of the Council, it is hereby clarified that all types of sprinklers, including fire water sprinklers attract GST at the rate of 12% vide SI. No. 195 B of Schedule II of Notification No. 1/2017-Central Tax (Rate) dated the 28of June 2017.
3. Further, on the basis of the recommendation of the GST Council, in view of the prevailing genuine doubts, the issues for the past period are regularized on “as is where is basis”.

Clarification regarding GST rate on parts of Poultry-keeping machinery:

1. Representations have been received seeking clarification regarding appropriate classification and applicable GST rate on supply of ‘parts’ of Poultry-keeping machinery.
2. Parts of Poultry-keeping machinery are classifiable under tariff item 8436 91 00 and attract GST at the rate of 12% vide Sl. No. 199 of Schedule II of Notification No. 1/2017-Central Tax (Rate), dated the 28 June 2017. On the recommendations of the Council, to bring clarity on the issue, the relevant entry at Sl. No. 199 of Schedule II of Notification No. 1/2017-Central Tax (Rate) dated the 28 June 2017, has been amended vide Notification No. 2/2024-Central Tax (Rate), dated the 12 July 2024 to specifically include ‘parts’ of Poultry-keeping machinery.
3. Further, on the basis of the recommendation of the GST Council, in view of the prevailing genuine doubts, the issues for the past period are regularized on “as is where is basis”.

Clarification regarding the scope of expression ‘pre-packaged and labelled’ for supply of agricultural farm produce:

2011. Representations have been received seeking clarification regarding the scope of expression ‘pre-packaged and labelled’ for the purposes of levy of GST on supply of agricultural farm produce in view of amendment made in Legal Metrology (Packaged Commodities) Rules, 2011.
2012. On the basis of the recommendation of the GST Council, the definition of ‘pre-packaged and labelled’ in Notification No. 1/2017-Central Tax (Rate) and Notification No. 2/2017-Central Tax (Rate), both dated the 28 June 2017, has been amended vide Notification No. 2/2024-Central Tax (Rate) dated 12 July 2024 and Notification No. 3/2024-Central Tax (Rate) dated 12 July, 2024, respectively, to exclude the supply of agricultural farm produce in package(s) of commodities containing quantity of more than 25 kilogram or 25 litre from the scope of ‘pre-packaged and labelled’. Consequently, supply of agricultural farm produce in package (s) containing quantity of more than 25 kilogram or 25 litre will not attract GST levy of 5%.
2013. Further, on the basis of the recommendation of the GST Council, in view of the prevailing genuine doubts, the issues for the past period are hereby regularized on “as is where is” basis.

Clarification regarding supplies of goods made to or by agency engaged by Government

1. Prior to 17 July 2022, supplies of pulses and cereals attracted GST at rate of 5%, wherein the said goods were put up in a unit container and bearing a registered brand name and/or bearing a brand name on which an actionable claim or enforceable right in a court of law is available.
2. On the basis of the recommendation of the GST Council, in view of the genuine interpretational issues, the issues for the past period from 1-7-2017 up to 17-7-2022 are hereby regularized on “as is where is” basis for supplies made to or by any agency engaged by Union Government or State Government/Union Territory for procurement and sale of such goods under any programme/scheme duly approved by the Central Government or any State Government intended to distribute such goods at free of cost or at subsidized rate to the eligible beneficiaries like economically weaker sections of the society subject to following conditions, namely:–

– the concerned supplier furnishes a certificate from an officer not below the rank of the Deputy Secretary to the Government of India or the Deputy Secretary to the State Government or the Deputy Secretary in the Union Territory concerned recommending that supplies have been made to or by an agency engaged by Union Government or State Government/Union Territory for procurement and sale of such goods under any programme/scheme duly approved by the Central Government or any State Government intended to distribute such goods at free of cost or at subsidized rate to the eligible beneficiaries like economically weaker sections of the society, within a period of 180 days from the date of issuance of this Circular to the jurisdictional commissioner of the Central Tax or jurisdictional commissioner of the State Tax, or jurisdictional officer of the Union Territory Tax, as the case maybe; and

– Input Tax Credit shall not be allowed on such inputs and, if availed on such inputs, it shall be reversed within a period of 180 days from the date of issuance of this Circular, if the supplier intends to take the benefit under the proposed regularisation.

Difficulty, if any, in the implementation of this circular may be brought to the notice of the Board.

• Notification no. 3/2024, dated 12-7-2024 – Central Tax (rate) (Section 11 of the Central Goods and Services Tax Act, 2017 – Power to grant exemption from tax – list of CGST exempt goods (nil rated goods)

1. In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue), No. 2/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 674(E), dated the 28 June, 2017, namely:-

In the said notification, after the Schedule, in the Explanation, in clause (ii), after the entries relating thereto, the following proviso shall be inserted, namely:

“Provided that notwithstanding anything contained in the Legal Metrology Act, 2009 (1 of 2010) and the rules made thereunder, as amended from time to time, the supply of agricultural farm produce in package(s) of commodities containing quantity of more than 25 kilogram or 25 litres shall not be considered as a supply made within the scope of expression ‘pre-packaged and labelled’.”

2024. This notification shall come into force from the 15 July 2024.

• Notification no. 14/2024, dated 10-7-2024 – Central Tax (Section 44 of the Central Goods and Services Tax Act, 2017 – Annual Return – Exemption to registered person from filing annual return whose aggregate turnover in the Financial Year 2023-24 is up to 2 crores

In exercise of the powers conferred by the first proviso to section 44 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Commissioner, on the recommendations of the Council, hereby exempts the registered person whose aggregate turnover in the financial year 2023-24 is up to two crore rupees, from filing annual return for the said financial year

• Notification no. 15/2024- Central Tax, dated 10-7-2024 section 52 of the Central Goods and Services Tax Act, 2017 – Collection of tax at source – electronic commerce operator to collect 0.25 per cent of net value of intra-state taxable supplies made through it where consideration with respect to such supplies is collected by said operator

1. In exercise of the powers conferred by sub-section (1) of section 52 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No. 52/2018-Central Tax, dated the 20th September, 2018 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 900(E), dated the 20 September, 2018, namely:-In the said notification, for the words “half per cent.”, the figure and word “0.25 per cent.” shall be substituted.
2. This notification shall come into force from the date of its publication in official gazette.

• Notification no. 4/2024, dated 12-07-2024- Central Tax (rate) (Section 11 of the Central Goods and Services Tax Act, 2017 – Power to grant exemption from tax – CGST exempt services (nil rated services)

As per  No. 12/2017-Central Tax (Rate), dated the 28 June 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 691(E), dated the 28th June, 2017, namely: —

In the said notification, after serial number 12 and the entries relating thereto, the following serial number and entries shall be inserted, namely: –

• Supply of accommodation services having value of supply less than or equal to twenty thousand rupees per person per month provided that the accommodation service is supplied for a minimum continuous period of ninety days.

This notification shall come into force with effect from the 15 July 2024.

• Companies (Significant Beneficial Owners) Amendment Rules, 2024

Ministry of Corporate Affairs has amended the Companies (Significant Beneficial Owners) Rules, 2018 wherein Form No BEN-2 (Return to the Registrar in respect of declaration under section 90) has been substituted as specified therein and such rules shall be called Companies (Significant Beneficial Owners) Amendment Rules, 2024.

• (Companies (Management and Administration) Amendment Rules, 2024)

Ministry of Corporate Affairs has amended the Companies (Management and Administration) Rules, 2014 wherein Form No MGT-6 (Return to the Registrar in respect of declaration under section 89 received by company) has been subsituted as specified therein and such rules shall be called Companies (Management and Administration) Amendment Rules, 2024.

• (Filings under section 124 and section 125 of the Companies Act)

The Ministry of Corporate Affairs (MCA) has notified waiver for making compliances thereof, additional fee on filing of various IEPF e-forms (IEPF -1, IEPF-1A, IEPF-2, IEPF-4) and e- verification of claims filed in e-form IEPF-5, till 16 August 2024. Also, one time relaxation for filing of e-verification under third proviso to sub-rule (3) of rule 7 of IEPFA (Accounting, Audit, Transfer and Refund) Rules has also been provided till 16 August 2024.

• Companies (Appointment and Qualification of Directors) (Amendment) Rules, 2024.

The amendment provides that if a director intends to update his personal mobile number or email address again at any time during the financial, he shall update the same by submitting e-form DIR-3 KYC on payment of fees of five hundred rupees.

They shall come into force from the 01 August 2024.

• Companies Nidhi (Amendment) Rules, 2024

The Ministry of Corporate Affairs on 16 July 2024 has issued the Nidhi (Amendment) Rules, 2024. They shall come into force immediately. The amendment mandates that a company shall not use the words “Nidhi Limited” in its name unless it is declared as a Nidhi company under sub-section (1) of section 406 of the Companies Act, 2013.

• SEBI amends AIF Regulations, 2012; introduces norms for ‘Migrated Venture Capital Funds

Securities and Exchange Board of India (SEBI) has issued the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2024, which amend the existing regulations for Alternative Investment Funds (AIFs). The amendment introduces a new category called “migrated venture capital fund” for funds previously registered under the Venture Capital Funds Regulations, 1996. It provides guidelines for the registration, operation, and reporting requirements for these migrated funds. Key changes include new definitions, eligibility criteria, private placement restrictions, and investment conditions. The regulations also address the procedures for fund registration and the prohibition on public solicitations for subscriptions. These amendments are effective from the date of their publication in the Official Gazette.

• Appointed date for SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2022

According to new modifications, the pre-open session for IPOs will be for a duration of 60 minutes i.e, from 9-10 am, out of which 45 minutes will be allowed for order entry, order modification and order cancellation and 10 minutes for order matching and trade confirmation.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for    the period 27.07.2024.

Executive Summary

Income Tax

• Section 10(46) Of the Income-Tax Act, 1961-Exemptions–Statutory body/Authority/Board /Commission – Notified Body or Authority.
• Amendment in Form No. 27Q.
• Special provision for collection of Tax at Source for Non-Filer of Income Tax Returns u/s 206CCA
• Special provision for Deduction of Tax at Source for Non-Filer of Income Tax Return u/s 206AB

Goods And Service Tax (GST)

• Filing of information by manufacturers of Pan Masala and Tobacco taxpayers

Companies Act 2013/ Other Laws

• Clarification Regarding Notification Pertaining to Restricting Import of Specific Items

• Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees Recommendation Guidelines 2024
• SEBI amends Insider Trading norms, mandates Compliance Officer to approve/reject trading plan within 2 days of receipt
• SEBI modifies duration for call auction in pre-open session for IPOs and relisted scrips

Section 10(46) of the Income Tax Act, 1961- Exemption- Statutory body/ Authority/ Board/ Commission – Notified Body or Authority.

• The Central Government hereby notifies the Mathura Vrindavan Development Authority, an authority constituted under the Uttar Pradesh Urban Planning Development Act, 1973 (President’s Act 11 of 1973), for the purposes of the (46) clause of Section 10.

• This notification shall be effective from the assessment year 2024-25, subject to the condition that the assessee continues to be an authority constituted under the Uttar Pradesh Urban Planning Development Act, 1973 with one or more of the purposes specified in sub-clause (a) of clause (46A) of section 10 of the Income-tax Act

AND

• The Central Government hereby notifies for the purposes of the said clause, ‘Real Estate Appellate Tribunal, Punjab’ (PAN AAALR2230D), a body constituted by the Government of Punjab, in respect of the following specified income arising to that body, namely: —

2017. Levy of fees/charges/fines collected under The Real Estate (Regulation and Development) Act, 2016 (Central Act No. 16 of 2016) and Punjab State Real Estate (Regulation and Development) Rules, 2017.
2018. Government Grants
2019. Interest on Bank Deposits

• This notification shall be effective subject to the conditions that Real Estate Appellate Tribunal, Punjab –

1. shall not engage in any commercial activity
2. its activities and the nature of the specified income shall remain unchanged throughout the financial years
3. shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

• This notification shall be deemed to be applicable for Assessment Year 2023-2024 to Assessment Year 2027-2028.
• Amendment in Form 27Q

In exercise of the powers conferred by section 295, read with sub-section (3) of section 200 of the Income-tax Act, 1961, The Central Government hereby makes the following rules further to amend the Income-tax Rules, 1962, namely: –

• These rules may be called the Income-tax (Sixth Amendment) Rules, 2024.
• They shall come into force on the 1st day of July 2024.

In the Income-tax Rules, 1962, the following note shall be inserted in Form No. 27Q in the Annexure, under the heading “Verification” in the Notes, after Note No. 7 ––

• ‘7A. Write “P” if lower deduction or no deduction is in view of notification issued under sub-section (1F) of section 197A.’.
• Special provision for Collection of Tax at Source for Non-Filer of Income Tax Returns u/s 206CCA

• Through Notification No. 46/2024/F.NO. 370142/8/2024-TPL dated 27.05.2024, Central Government notifies Reserve Bank of India to be a specified person to whom higher collection of Tax at Source will not be applicable as per Clause (ii) of the proviso to sub section (3) of Section 206CCA of Income Tax Act.
• This notification shall come into force from the date of its publication in the Official Gazette.

• Special provision for Deduction of Tax at Source for Non-Filer of Income Tax Returns u/s 206AB
• Through Notification No. 46/2024/F.NO. 370142/8/2024-TPL dated 27.05.2024, Central Government notifies Reserve Bank of India to be a specified person to whom higher collection of Tax at Source will not be applicable as per Clause (ii) of the proviso to sub section (3) of Section 206AB of Income Tax Act.
• This notification shall come into force from the date of its publication in the Official Gazette.

Filing of information by manufacturers of Pan Masala and Tobacco taxpayers

Referring to the Notification No. 04/2024 – Central Tax dated 05-01-2024 to seek information from taxpayers dealing in the goods mentioned therein. Two forms have been notified vide this notification namely GST SRM-I and GST SRM-II. The former pertains to the registration and disposal of machines while the latter asks for information on inputs and outputs for a month.

Form GST SRM-I meant for registration of machines, has already been made available on the portal w.e.f. 15-05-2024. Concerned taxpayers are using the same for the registration of machines and other information asked therein.

Now, the second form namely, Form GST SRM-II is also available on the portal.  Taxpayers dealing in the manufacture of Pan Masala and Tobacco products can now report the details of inputs and outputs procured and consumed for the relevant month.

• Clarification Regarding Notification Pertaining to Restricting Import of Specific Items

Directorate General of Foreign Trade has issued a policy circular for clarification regarding Notification No. 17/2024-25 dated June 11, 2024 pertaining to restricting import of specific items under ITC (HS) Codes 71131912, 71131913, 71131914, 71131915 and 71131960, Representations have been received from SEZ wherein it is clarified that import made by SEZ units (Other than FTWZ units) under the ITC (HS) Codes 71131912, 71131913, 71131914, 71131915 and 71131960 are outside the purview of this notification.

    Insolvency and Bankruptcy Code

• Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees Recommendation Guidelines 2024

Insolvency and Bankruptcy Board of India has issued guidelines to provide the procedure for preparing panel of Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees:

1. These guidelines may be called the Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) Guidelines, 2024
2. The panel of IPs prepared as per these guidelines will be effective from 1st July 2024 to 31st December 2024.

• SEBI amends Insider Trading norms, mandates Compliance Officer to approve/reject trading plan within 2 days of receipt

SEBI has notified the SEBI (Prohibition of Insider Trading) (Second Amendment) Regulations, 2024. As per the amended norms, the compliance officer must approve or reject the trading plan within 2 trading days of receiving it. Further, the compliance officer must notify the approved plan to the stock exchanges on which the securities are listed, on the day of approval. These regulations are effective from the 90th day of publication in the Official Gazette.

• SEBI modifies duration for call auction in pre-open session for IPOs and relisted scrips

According to new modifications, the pre-open session for IPOs will be for a duration of 60 minutes i.e, from 9-10 am, out of which 45 minutes will be allowed for order entry, order modification and order cancellation and 10 minutes for order matching and trade confirmation.

Disclaimer: Information in this note is intended to provide only a general update on the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for   the period 01.06.2024 to 30.06.2024

Executive Summary

Income Tax

• Cost inflation Index (CII) under section 48 for financial year 2024-25
• Exemption under section 10 (46) of Income of Tamil Nadu Water Supply and Drainage Board subject to few conditions.
• CBDT releases new functionality in AIS For Taxpayers.
• CBDT issues guidelines for compulsory selection of Income-tax Returns (ITRs) for complete scrutiny during FY 2024-25

Goods And Service Tax (GST)

• Advisory on launch of E-Way Bill 2 Portal
• Information from manufacturers of Pan Masala and Tobacco taxpayer

Companies Act 2013/ Other Laws

• Relaxation of Additional Fees and Extension of Last Date of Filing of Form No. LLP BEN 2 and LLP Form No. 4D under the Limited Liability Partnership Act, 2008
• RBI decides to regularize prior issuance of partly paid units by AIFs to non-residents via compounding under FEMA
• SEBI strengthens risk management framework for Clearing Corporations (CCs);
• SEBI updates Investor Charter for stock exchanges and depositories to include new services and guidelines
• Master Circular for Issue and Listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper

• Cost inflation Index under section 48 For Financial Year 2024-25
• In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961, the Central Government hereby makes the following further amendments in the notification published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii) number O. 1790(E), dated the 5th June, 2017, namely: —
• In the said notification, in the Table, after serial number 23 and the entries relating thereto, the following serial number and entries shall be inserted, namely: –

TABLE

• This notification shall come into force with effect from the assessment year 2025-26 and subsequent assessment years.

• Exemption under section 10 (46) of Income of Tamil Nadu Water Supply and Drainage Board subject to few conditions.

• In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘Tamil Nadu Water Supply and Drainage Board, Chennai’ (PAN: AAALT0834F), a Board constituted under the Tamil Nadu Water Supply and Drainage Board Act, 1970 (Tamil Nadu Act of 1971), in respect of the following specified income arising to the said Board, namely: —
• Water charges for supply of water to recover the maintenance cost.
• Centage charges received from local bodies work like water supply scheme and sewerage scheme to compensate for establishment charges.
• Investigation and Detailed Project Report preparation charges for water supply and drainage scheme for establishment charges.
• Interest earned on Bank Deposits.
• This notification shall be effective subject to the conditions that Tamil Nadu Water Supply and Drainage Board, Chennai-

• shall not engage in any commercial activity.
• its activities and the nature of the specified income shall remain unchanged throughout the financial year(s); and
• shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.
• This notification shall be applicable from AY 2024-25 to AY 2028-29.

• CBDT Releases new functionality in AIS For Taxpayers

In AIS, taxpayers have been provided with a functionality to furnish feedback on every transaction displayed therein. This feedback helps the taxpayer to comment on the accuracy of the information provided by the Source of such information. In case of wrong reporting, the same is taken up with the Source for their confirmation, in an automated manner. It may be noted that information confirmation is currently made functional with regard to information furnished by Tax Deductors /Collectors and Reporting Entities.

The Central Board of Direct Taxes (CBDT) has now rolled out a new functionality in AIS to display the status of information confirmation process. This will display whether the feedback of the taxpayer has been acted upon by the Source, by either partially or fully accepting or rejecting the same. In case of partial or full acceptance, the information is required to be corrected by filing a correction statement by the Source. The following attributes shall be visible to the taxpayer for status of Feedback confirmation from Source.

• Whether Feedback is shared for confirmation: – This will let the taxpayer know if the feedback has been shared with the Reporting Source for confirmation or not.
• Feedback Shared on: – This will let the taxpayer know the date on which the feedback has been shared with the Reporting Source for confirmation.
• Source responded on: – This will let the taxpayer know the date on which the Reporting Source has responded on the feedback shared with it for confirmation.
• Source response: – This will let the taxpayer know the response provided by the Source on the taxpayer’s feedback.

• The CBDT has issued parameters and procedures for compulsory selection of ITRs during FY 2024-25, in below cases.

• Cases pertaining to Survey u/s 133A of the Income-tax Act
• Cases pertaining to Search & Seizure
• Cases in which notice u/s 142(1) of the Income-tax Act has been issued, but no ITR has been furnished
• Cases in which notice u/s 148 has been issued,
• Cases relating to to registration / approval of charitable trusts / institutions claiming tax exemption
• Cases involving addition in an earlier Assessment Year on a recurring issue of law / fact
• Cases relating to specific information regarding tax evasion

• Advisory on launch of E0way Bill 2 Portal:

GSTN is pleased to inform that NIC is releasing the E-Way Bill 2 Portal (https://ewaybill2.gst.gov.in) on 1st June 2024. This portal ensures high availability and runs in parallel to the e-way Bill main portal. The e-way bill 2 portal synchronizes the e-way bill details with main portal within a few seconds. The highlights of the portal are as follows-:

• Presently, E-Way Bill 2 Portal provides the critical services of E-Way Bill system, and gradually it will be extended with other services of e-way bill system.
• E-Way Bills can be generated and updated on the E-Way Bill 2 Portal independently.
• E-Way Bill 2 portal provides the web and API modes of operations for e-way bill services.
• The taxpayers and logistic operators can use the E-Way Bill 2 portal with the login credentials of the main portal.
• The taxpayers and logistic operators can use the E-Way Bill 2 portal during technical glitches in e-way bill main portal or any other exigencies.
• The Criss-Cross operations of printing and updating of Part-B of E-Way Bills can be carried out on these portals. That is, updating of Part-B of the E-Way bills of portal 1 can be done at portal 2 and vice versa.
• In case E-Way Bill main portal is non-operational because of technical reasons, the Part-B can be updated to the E-Way Bills, generated at Portal 1, at portal 2 and carry both the E-way Bill slips.
• For further details, please visit the e-way bill portals.

• Information from manufacturers of Pan Masala and Tobacco taxpayers:

The government had issued a notification to seek information from taxpayers dealing in the goods mentioned therein vide Notification No. 04/2024 – Central Tax dated 05-01-2024. Two forms have been notified vide this notification namely GST SRM-I and GST SRM-II. The former pertains to registration and disposal of machines while the later asks information on inputs and outputs during a month.

To begin with, facility to register the machines have been made available on the GST Portal to file the information in Form GST SRM-I. All taxpayers dealing in the items mentioned in the said notification may use the facility to file the information about machines. Form GST SRM-II will also be made available on the portal shortly.

• Relaxation of additional fees and extension of last date of Filing of Form No. LLP Ben 2 and LLP form no. 4D under The Limited Liability Partnership Act, 2008

The Ministry of Corporate Affairs (MCA) has notifed that relaxation of additional fees and extension of last date of filing of Form No. LLP BEN-2 and LLP Form No. 4 under the Limited Liability Partnership Act, 2008 in the view of transition of MCA-21 from version- to version-3. These forms shall be filed without any addition fees upto July 01, 2024.

• RBI decides to regularize prior issuance of partly paid units by AIFs to non-residents via compounding under FEMA

The Reserve Bank of India (“RBI”) vide its circular dated May 21, 2024 (“Circular”) has required that issuance of partly paid-up units by Alternative Investment Funds (“AIFs”) to foreign investors prior to March 14, 2024, should be regularised through compounding under Foreign Exchange Management Act, 1999 (“FEMA”). Compounding by RBI is prescribed for the contravention of foreign exchange regulations as per Foreign Exchange (Compounding Proceedings) Rules, 2000, and involve payment of a fees. In many instances, compounding requires payment of a monetary penalty to RBI.

• SEBI strengthens risk management framework for Clearing Corporations (CCs)

SEBI has reviewed the existing collaterals accepted by CCs and specified the prudential norms for exposure of CCs. As per the amended norms units of growth plan of overnight mutual fund schemes shall be accepted as Cash Equivalent by CCs with a haircut of 5%. Earlier, a limit of 10% was specified. The 10% haircut remains unchanged for other overnight mutual fund plans. Further, the Prudential Norms for Exposure of CCs has also been specified. The circular shall be effective from 01st Aug, 2024.

• SEBI updates Investor Charter for stock exchanges and depositories to include new services and guidelines

In November 2021, SEBI formulated the Investor Charter for Depositories/ Depository Participants (DPs) and Stock exchanges. It contains information on services provided to investors, such as grievance redressal mechanisms, rights and obligations of investors, etc. With the recent introduction of the Online Dispute Resolution (ODR) platform and SCORES 2.0 by SEBI, the Investor Charter has been updated to incorporate these new services.

• Master Circular for Issue and Listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper

The Securities and Exchange Board of India has consolidated all the applicable circulars/ directions at one place which are applicable for for Issue and Listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper, till May 21, 2024.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for    the period 30.05.2024.

Executive Summary

Income Tax

• Clarification on Time Limit for verification of return of income after uploading.
• Notification of Donations to certain funds, charitable institutions, etc under Section 80G of Income Tax Act, 1961
• Partial Modification of Circular No. 3 Of 2023, Dated 28-3-2023 regarding consequences of PAN becoming inoperative as per Rule 114AAA of the Income-Tax Rules, 1962
• Section 10(46) of The Income-Tax Act, 1961 – Exemptions – Statutory Body/Authority/Board/Commission – Notified Body or Authority
• Extension of Due Date for filing of Form 10A/10AB.

Goods And Service Tax (GST)

1. Advisory Self Enablement For E-Invoicing
2. Advisory on Reset and Re-filing of GSTR-3B of some taxpayers
3. Advisory: Auto-populate the HSN-wise summary from e-Invoices into Table 12 of GSTR-1
4. Section 148 of the Central Goods and Services Tax Act, 2017 – Special Procedure for certain processes – Special Procedure to be followed by Registered Person engaged in manufacturing Notified Goods

Companies Act 2013/ Other Laws

1. RBI issues revised master circular on ‘Bank Finance to Non-Banking Financial Companies (NBFCs)

2. SEBI Amends Alternative Investment Funds Regulations, 2012 | Introduces a New Regulation w.r.t ‘dissolution Period’.

3. SEBI has removed the requirement to publish text on Contract Note with respect to Fit and Proper status of shareholders.

• Clarification Time limit for verification of return of Income after uploading.

1. The notification was issued by the DGIT(Systems) specifying the time limit for verification of Income Tax Return (ITR) as 30 days from the date of transmitting the data of ITR electronically.

It is clarified that:

• Where the return of income is uploaded and e-verification/ITR-V is submitted within 30 days of uploading – In such cases the date of uploading the return of income shall be considered as the date of furnishing the return of income.
• • Where the return of is uploaded but e-verification or ITR-V is submitted after 30 days of uploading – In such cases the date of e-verification/ITR-V submission shall be treated as the date of furnishing the return of income and all consequences of late filing of return under the Act shall follow, as applicable.
  1. The duly verifed ITR-V in prescribed format and in the prescribed manner shall be sent either through ordinary or speed post or in any other mode to the following address only:

  Centralised Processing Centre,

  Income Tax Department,

  Bengaluru – 560500, Karnataka.

  2. The date on which the duly verified ITR-V is received at CPC shall be considered for the purpose of determination of the 30 days period from the date of uploading of return of income.

   

   

  3. It is further clarified that where the return of income is not verified within 30 days from the date of uploading or till the due date for furnishing the return of income as per the Income-tax Act, 1961 – whichever is later – such return shall be treated as invalid due to non-verification.
  4. This notification will come into effect from 1-4-2024.
  • Section 80G of Income Tax Act, 1961- Deductions- Donations to certain funds, charitable institutions, etc.

  In the exercise of the powers conferred by clause (b) of sub-section (2) of section 80G of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies “Shree Ramanuj Kot Laxmi Venkatesh Mandir” managed by Shree Ramanuj Kot Trust, Indore, Madhya Pradesh (PAN: AAATR0970L) to be place of historic importance and a place of public worship of renown throughout the state of Madhya Pradesh for the purposes of the said section.

   

  The Notification will be valid only for the renovation or repair of the “Shree Ramanuj Kot Laxmi Venkatesh Mandir” to the extent of Rs. 1,63,06,311/-(Rupees One Crore Sixty-Three Lakhs Six Thousand Three Hundred and Eleven only) and will cease to be effective after the said amount has been collected or on 31-3-2029, whichever is earlier

  • Partial Modification of Circular No. 3 of 2023, Dated 28-03-2023 in regard to consequences of PAN become in operative as per Rule 114AAA of the Income Tax Rules

  In partial modification and in continuation of circular no. 3 of 2023 hereby specifies that for the transactions entered into upto 31-03-2024 and in cases where the PAN becomes operative (as a result of linkage with Aadhaar) on or before 31-05-2024, there shall be no liability on the deductor/collector to deduct/collect the tax under section 206AA/206CC, as the case maybe, and the deduction/collection as mandated in other provisions of Chapter XVII-B or Chapter XVII-BB of the Act, shall be applicable.

   

  • Section 10(46) of The Income-Tax Act, 1961 – Exemptions – Statutory Body/Authority/Board/Commission – Notified Body or Authority
  1. In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘Kerala Autorickshaw Workers Welfare Fund Scheme, Kollam’ (PAN: AAATK3080E), a Board constituted by the Government of Kerala, in respect of the following specified income arising to the said Authority, namely: —
  • Grant received from the State Government of Kerala.
  • Contribution received from the workers registered as members in the Scheme.
  • Contribution received from self-employed persons and employers for workers, registering as members of the Scheme.
  • Registration Fees
  • Interest earned on Bank Deposits.
  2. This notification shall be effective subject to the conditions that Kerala Autorickshaw Workers Welfare Fund Scheme, Kollam, –
  • shall not engage in any commercial activity.
  • activities and the nature of the specified income shall remain unchanged throughout the financial years.
  • shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.
  3. This notification shall be applied from assessment year 2024-25 to 2028-29.
  • Extension of Due Date for filing of Form 10A/10AB.

  CBDT extends the due date for filing of Form 10A/10AB under the Income Tax Act, 1961 up to 30^th June 2024 in respect of certain provisions of section 10(23C)/ section 12A/ section 80G/ and section 35 of the Act.

• Self-Enablement For E- Invoicing:

The Central Government, on the recommendations of the Council, introduced that if your turnover exceeds INR 5 crores in the financial year 2023-2024, you will be required to start e-Invoicing from the next financial year, i.e., from 1st April 2024 onwards. It may also be noted that the same is applicable if the threshold is crossed in any of the proceeding financial years too.

For those who meet the notification criteria but have not yet been enabled on the portal, you can self-enable for e-Invoicing by visiting https://einvoice.gst.gov.in and start reporting through any of the 4 new Invoice Registration Portals (IRPs) – from e-Invoice IRP 3 to e-Invoice IRP 6.

• Reset and Re-filing of GSTR-3B of some taxpayers:

This has reference to the facility for re-filing of GSTR-3B for some of the taxpayers. It was noticed that there were discrepancies in the returns of some taxpayers during the filing process between the saved data in the GST system and filed data in the fields of ITC availment and payment of tax liabilities. The matter was examined and deliberated by the Grievance Redressal Committee of the GST Council and as a facilitation measure the Committee decided that these returns shall be reset, to give opportunity to such taxpayers to correct the discrepancy.

Accordingly, only the affected taxpayers have been communicated on their registered email-ids and the affected returns are visible on their respective dashboards for the purpose of refiling with the correct data. The taxpayers who have received such communication are requested to visit their dashboard and re-file their GSTR-3B within 15 days of receipt of such communication.

• Auto-populate the HSN-wise summary from e-Invoices into Table 12 of GSTR-1

There is a new feature to auto-populate the HSN-wise summary from e-Invoices into Table 12 of GSTR-1 is now available on the GST portal. This allows for direct auto-drafting of HSN data into Table 12 based on e-Invoice data. The HSN-wise summary data auto-populated into Table 12 is intended for your convenience. Before its submission, kindly ensure to reconcile the data with records.

Any discrepancies or errors should be manually corrected or added to Table 12 before final submission.

• Section 148 of the Central Goods and Services Tax Act, 2017 – Special Procedure for certain processes – Special Procedure to be followed by Registered Person engaged in manufacturing Notified Goods

In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017, the Central Government, on the recommendations of the Council, hereby makes the following amendments in the Notification No. 4/2024-Central Tax, dated the 5th January, 2024 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), namely: —

In the said notification, in para 4, for the words and letters “1st day of April, 2024”, the words and letters “15th day of May, 2024” shall be substituted.

This notification shall come into force from the 1st day of April 2024.

• RBI issues revised master circular on ‘Bank Finance to Non-Banking Financial Companies (NBFCs)

RBI has issued the revised Master Circular on ‘Bank Finance to Non-Banking Financial Companies (NBFCs)’. This circular consolidates all instructions issued up to 23.04.2024. The purpose is to outline the RBI’s regulatory policy regarding the financing of NBFCs by banks. This circular applies to all Scheduled Commercial Banks (excluding RRBs). It highlights norms regarding bank finance to NBFCs registered with RBI, NBFCs not requiring registration and activities not eligible for bank credit.

• SEBI Amends Alternative Investment Funds Regulations, 2012 | Introduces a New Regulation w.r.t ‘dissolution Period.’

SEBI has notified the SEBI (Alternative Investment Funds) (Second Amendment) Regulations, 2024. As per the amended norms, a new regulation 29B relating to the dissolution period has been inserted. It states that a scheme of an Alternative Investment Fund may enter a dissolution period in the manner and subject to the conditions specified by the Board. Further, SEBI has introduced definitions of ‘dissolution period’ and ‘encumbrance’ under Regulation 2 of existing regulations.

• SEBI has removed the requirement to publish text on Contract Note with respect to Fit and Proper status of shareholders.

SEBI vide circular dated April 24, 2024, in order to promote ease of doing business has removed the requirement to publish text on Contract Note with respect to Fit and Proper status of shareholders. In lieu of text only a reference of the applicable regulation regarding fit and proper status of shareholders needs to be made part of the contract note.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for    the period 30.04.2024.

Executive Summary

Income Tax

• Section 10(46) of the Income-Tax Act, 1961 – Exemptions – Statutory Body/Authority/Board/Commission – Notified Body or Authority.
• Opening Of Income Tax Offices on Holidays to Facilitate Pending Departmental Work
• Section 35(1)(ii) of the Income Tax Act 1961- Scientific Research expenditure – approved scientific research association/institution.
• Section 194S of the Income Tax Act, 1961- Deduction of Tax at Source- payment on transfer of virtual digital asset.
• Section 10(22B) of the Income tax Act, 1961- Exemptions – News Agency.
• Revision of Interest rates for small savings scheme.
• DTAA between the Republic of India and Kingdom of Spain.
• No deduction of tax under section 80LA

Goods And Service Tax (GST)

• Advisory on GSTR-1/IFF Introduction of New 14A and 15A tables.
• Advisory on Integration of E-Waybill system with New IRP Portal.
• Instances of Delay in registration reported by some Taxpayers despite successful Aadhar Authentication.

Companies Act 2013/ Other Laws.

• SEBI issues safeguards to address investors’ concerns regarding transfer of securities in demat mode.

• Master Direction on NBFC – Housing Finance Company (Reserve Bank) Directions, 2021

• Section 10(46) of the Income-Tax Act, 1961 – Exemptions – Statutory Body/Authority/Board/Commission – Notified Body or Authority.

1. In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘Uttar Pradesh Real Estate Regulatory Authority’ (PAN AAAGU0671E), an Authority constituted by the State Government of Uttar Pradesh, in respect of the following specified income arising to that Authority, namely: —

(a) Amount received as Grant-in-aid or loan/advance from Government

(b) Fee/penalty received from builders/developers, agents or any other stakeholders as per the provisions of the Real Estate (Regulation and Development) Act, 2016

(c) Fee received under Right to Information Act, 2005; and

(d) Interest earned on bank deposits.

2. This notification shall be effective subject to the conditions that Uttar Pradesh Real Estate Regulatory Authority, –

(a) shall not engage in any commercial activity.s

(b) activities and the nature of the specified income shall remain unchanged throughout the financial years

(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

3. This notification shall be deemed to have been applied from the Assessment Year 2021-2022.

And

1. In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘Karnataka Urban Water Supply and Drainage Board’ (PAN: AAATK5837F), a Board constituted under the Karnataka Urban Water Supply and Drainage Board Act, 1973 (Karnataka Act No. 25 of 1974), in respect of the following specified income arising to that Board, namely:—

(a) Establishment, administrative, supervision, water charges and rent collected as per the Karnataka Urban Water Supply and Drainage Board Act, 1973 (Karnataka Act No. 25 of 1974)

(b) Forfeiture of earnest money deposit as per the Karnataka Urban Water Supply and Drainage Board Act, 1973 (Karnataka Act No. 25 of 1974);

(c) Penalty, Sale of Scrap, Storage charges and Survey charges as per the Karnataka Urban Water Supply and Drainage Board Act, 1973 (Karnataka Act No. 25 of 1974) and

(d) Interest earned on bank deposits.

2. This notification shall be effective subject to the conditions that Karnataka Urban Water Supply and Drainage Board-

(a) shall not engage in any commercial activity

(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and

(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

3. This notification shall be deemed to have been applied from Assessment Year 2021-2022.

And

1. In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘National Mission for Clean Ganga’, New Delhi (PAN AABAN3769K), an Authority constituted under the River Ganga (Rejuvenation, Protection and Management) Authority Order, 2016, in respect of the following specified income arising to that Authority, namely:

(a) Grants-in-Aid received from Government of India; and

(b) Interest earned on bank deposits.

2. This notification shall be effective subject to the conditions that National Mission for Clean Ganga, New Delhi –

(a) shall not engage in any commercial activity;

(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and

(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

3. This notification shall be deemed to have been applied from Assessment Year 2021-2022.

• Opening of Income Tax offices on holidays to facilitate pending departmental work.

The Financial Year 2023-24 closes on 31st March 2024, which is Sunday. Further, 30th March 2024 is a Saturday and 29th March 2024 is a closed holiday. Therefore, to facilitate completion of pending departmental work, all the Income Tax Offices throughout India shall remain open on 29th, 30th and 31st March 2024. This direction is issued for administrative convenience by the Central Board of Direct Taxes in exercise of powers conferred under section 119 of the Income-tax Act, 1961.

• Section 35(1)(ii) of the Income Tax Act 1961- Scientific Research expenditure – approved scientific research association/institution.

1. In exercise of the powers conferred by clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (43 of 1961), read with Rules 5C and 5E of the Income-tax Rules, 1962, the Central Government hereby approves ‘National Forensic Sciences University, Gandhinagar‘ (PAN: AAALN3742Q), ‘Sardar Vallabhbhai National Institute of Technology’, Surat (PAN: AAAJS1184P) and ‘Indian Institute of Technology, Kharagpur’ (PAN: AAAJI0323G) under the category of ‘University, college or other institution’ for ‘Scientific Research’ for the purposes of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961, read with rules 5C and 5E of the Income-tax Rules, 1962.
2. This Notification shall be applicable from Assessment Years 2024-25 to 2028-29.

• Section 194S of the Income Tax Act, 1961- Deduction of Tax at Source-payment on transfer of virtual digital asset.

As per section 194S of the Income-tax Act, 1961, any person responsible for paying to any resident person any sum by way of consideration for the transfer of a virtual digital asset is required to deduct an amount equal to 1% of such sum as income tax thereon. Further, as per sub-rule (4D) of rule 31A, a specified person’ is required to report such deductions in a challan-cum-statement electronically in Form No. 26QE within thirty days from the end of the month in which such deduction is made.

It has come to the notice of the Central Board of Direct Taxes (‘the Board’) that specified persons who deducted tax under section 194S of the Act during the period from 1-7-2022 to 31-1- 2023, could not file Form No. 26QE and pay corresponding TDS on or before the due date, due to unavailability of Form No. 26QE. This has resulted in consequential levy of fee under section 234E and interest under clause (ii) of sub-section (1A) of section 201 of the Act. Further, the specified persons who deducted tax under section 194S during the period from 1-2-2023 to 28-2-2023 had insufficient time to file Form No. 26QE and pay corresponding TDS thereon.

To address the grievances of such specified persons, the Board has decided to extend the due date of filing of Form No. 26QE for specified persons who deducted tax under section 194S but failed to file Form No. 26QE. The due date is hereby extended to 30-5-2023 in those cases where the tax was deducted by specified persons under section 194S of the Act during the period from 1-7-2022 to 28-2-2023. Fee levied under section 234E and/or interest charged under section 201(1A) (ii) of the Act in such cases for the period up to 30-5-2023, shall be waived.

• Section 10(22B) of the Income tax Act, 1961- Exemptions – News Agency.

1. In exercise of the powers conferred by the clause (22B) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the “The Press Trust of India Limited, New Delhi” as a news agency set up in India solely for collection and distribution of news, for the purpose of the said clause for two assessment years 2022-23 to 2023-24.
2. The notification is subject to the condition that the news agency applies its income or accumulates it for application solely for collection and distribution of news and does not distribute its income in any manner to its members.

• Revision of Interest rates for small savings scheme.

The rates of interest on various Small Savings Schemes for the first quarter of FY 2024-25 starting from 1st April 2024 and ending on 30th June 2024 shall remain unchanged from those notified for the fourth quarter (1st January 2024 to 31st March, 2024) of FY 2023-24.

• Modification made in DTAA between Republic of India and Kingdom of Spain

In the said notification, in the Convention annexed therewith between the Republic of India and Kingdom of Spain, in Article 13 relating to Royalties and Fees for Technical Services, for paragraph 2, the following paragraph shall be substituted, namely: –

“2. However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the law of that State, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed ten per cent of the gross amount of royalties or fees for technical services.”.

Paragraph 2 of Article 13 of the said Convention, as amended by this notification, shall be applicable with effect from the assessment year 2024-25.

• No deduction of tax under section 80LA:

In exercise of the powers conferred by sub-section (1F) of section 197A read with subsection (1A) and sub-section (2) of section 80LA of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred as the Income-tax Act), the Central Government hereby notifies that no deduction of tax shall be made under the provisions of the Income-tax Act in respect of the payments made by any ‘payer’ to a person being a Unit of International Financial Services Centre, (hereinafter referred as ‘payee’), as specified in the notification.

• GSTN Issues advisory on GSTR-1/IFF:

(Introduction of New 14A and 15A tables)

The Central Government, on the recommendations of the Council, as per notification No. 26/2022 introduced two new Table 14A and Table 15A in GSTR-1 to capture the amendment details of the supplies made through e-commerce operators (ECO) on which e-commerce operators are liable to collect tax under section 52 or liable to pay tax u/s 9(5) of the CGST Act, 2017.

Now, these tables have been made live on the GST common portal and will be available in GSTR-1/IFF from February 2024 tax period onwards. These amendment tables are relevant for those taxpayers who have reported the supplies in Table 14 or Table 15 in earlier tax periods.

• GSTN Issues advisory on Integration of E-Waybill system with New IRP Portals –

GSTN announced the successful integration of E-Waybill services with four new IRP portals via NIC, enabling taxpayers to generate E-Waybills alongside E-Invoicing on these four IRPs across all six IRPs.

This new facility complements the existing services available on the NIC-IRP   portal, making E-Waybill services, along with E-Invoicing, available across all six IRPs.

• Instances of Delay in registration reported by some Taxpayers despite successful Aadhar Authentication in accordance with Rule 8 and 9 CGST, Rules, 2017

The Central Government In accordance with Rule 9 of the Central Goods and Services Tax (CGST) Rules, 2017, pertaining to the verification and approval of registration applications, following is informed:

Where a person has undergone Aadhaar authentication as per sub-rule (4A) of rule 8 but has been identified in terms of Rule 9(aa) by the common portal for detailed verification based on risk profile, your application for registration would be processed within thirty days of application submission.

Necessary changes would also be made to reflect the same in the online tracking module vis-à-vis processing of registration application.

• Master Direction on NBFC – Housing Finance Company (Reserve Bank) Directions, 2021

The Reserve Bank of India (the Bank), having considered it necessary in the public interest, and being satisfied that, for the purpose of enabling the Bank to regulate the financial system to the advantage of the country and to prevent the affairs of any Housing Finance Company (HFCs) from being conducted in a manner detrimental to the interest of investors and depositors or in any manner prejudicial to the interest of such HFCs, and in exercise of the powers conferred under sections 45L and 45MA of the Reserve Bank of India Act, 1934

• SEBI issues safeguards to address investors’ concerns regarding transfer of securities in demat mode.

Market regulator Securities and Exchange Board of India (SEBI) has announced new safeguards on March 20, 2024, to address the concerns of the investors on transfer of securities in dematerialized (demat) mode. As per people privy to the matter, this has been done in order to prevent fraud by means of transferring shares from inactive demat account/accounts.

Executive Summary

Income Tax

• Implementation of E-verification Scheme- 2021.
• National savings Time Deposit (Amendment) scheme 2024
• Sukanya Samriddhi Account (Amendment) Scheme 2024
• The returns for AY 2020-21 which were not processed electronically can be processed by 31-01-2024, to claim refunds.
• CBDT notifies income tax return forms for the Assessment Year 2024-25 well in
• Section 90 of the Income tax Act, 1961- Double Taxation Relief- Agreement between Government of Republic of India and Government of Samoa for exchange of Information with respect of taxes.
• Scientific Research Institution/Association approved Scientific Research Expenditure under Section 35(1)(ii) of the Income Tax Act, 1961.
• Order has been passed regarding Remission and extinguishment of Tax Demand under Income Tax Act, 1961. Waiver of Income Tax Demands as per Interim Budget 2024 has been Capped at Rs.100,000.

Goods And Service Tax (GST)

• Introduction of Consent Based Sharing of Information Furnished by Taxable Person through Notified System

Companies Act 2013/ Other Laws.

• MCA operationalizes Central Processing Centre (CPC) for the Centralized Processing of Corporate Filings

• Companies (Registration Offices and Fees) Amendment Rules, 2024 – Insertion Of Rule 10A

• Relaxation of additional fees and extension of last date of filing of form no. LLP BEN-2 and LLP Form no. 4D under Limited Liability Partnership Act, 2008

• Action against Paytm Payments Bank Ltd. under section 35A of the Banking Regulation Act, 1949

• Insolvency and Bankruptcy Board of India amends The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

• Enhancing Transparency and Stakeholder Engagement in Liquidation Process

• SEBI has issued an advisory against Fraudulent Trading Schemes claiming to be offered to Indian residents by FPI’s.

• Securities and Exchange Board of India (Employees’ Service) (Amendment) Regulations, 2024 – Amendment in Regulation 6 And Schedule

• Implementation Of E-Verification Scheme- 2021

The income tax Department has identified certain mismatches between third-party information on interest and dividend income, and the income tax Return (ITR) filed by taxpayers. In many cases, taxpayers have not even filed their ITR.

To reconcile the mismatch, an on-screen functionality has been made available in the Compliance portal of the e-filing website https://eportal.incometax.gov.in for taxpayers to provide their response. At present, the information mismatches relating to Financial Years 2021-22 and 2022- 23 have been displayed on the Compliance portal. The taxpayers are also being made aware of the mismatch through SMS and emails as per details available from the Department.

It is clarified that the said communication is not a notice.

In case the taxpayer has disclosed the interest income in the ITR under the line item ‘Others’ in the Schedule OS, she/he need not respond to the mismatch pertaining to the interest income. The said mismatch shall be resolved on its own and will be reflected in the portal as ‘Completed’.

• CBDT Introduced National Savings Time Deposit (Amendment) Scheme, 2024

In exercise of the powers conferred by section 3A of the government savings Promotion Act, 1873 (5 of 1873), the central government hereby makes the following scheme further to amend the national savings time deposit scheme, 2019, namely: –

1. This Scheme may be called the National Savings Time Deposit (Amendments) Scheme, 2024.

2. It shall be deemed to have come into force on the 1st day of January 2024.
3. In the National savings time deposit scheme, 2019 (hereinafter referred to as the said scheme), in paragraph 7: –

(a) in sub-paragraph 1(E), for the words, figures and letters, “on or after 1st day of July, 2023”, the words, figures, letters and brackets “between the 1st day of July 2023 and 31st day of December 2023 (both days inclusive)” shall be substituted;

(b) The rate of interest as specified in the Table below shall be applicable to the deposit made on or after the 1st day of January 2024 under the Scheme.

• Sukanya Samriddhi Account (Amendment) Scheme 2024

In exercise of the powers conferred by section 3A of the Government Savings Promotion Act, 1873 (5 of 1873), the Central Government hereby makes the following Scheme further to amend the Sukanya Samriddhi Account Scheme, 2019, namely: –

1. a) This Scheme may be called the Sukanya Samridhi account (Amendment) Scheme, 2024.
2. b) It shall be deemed to have come into force on the 1st day of January 2024.
3. In the Sukanya Samriddhi Account Scheme, 2019, in paragraph 5: –
4. in sub-paragraph (1B), for the words, figures and letters, “on or after the 1st day of April, 2023”, the following words, figures, letters and brackets “between 1st day of April 2023 to 31st day of December 2023 (both days inclusive)” shall be substituted;
5. The deposits made in the account on or after the 1st day of January 2024 and the balances at the credit of the account shall earn interest at the rate of 8.2 per cent. per annum.

• The returns for AY 2020-21 which were not processed electronically can be processed by 31-01-2024, in order to claim refunds.

1. The Central Board of Direct Taxes (Board) vide its orders under section 119 of the Income-tax Act, 1961 (Act), dated 16-10-2023 and 1-12-2023 on the captioned subject relaxed the time prescribed in second proviso to sub-section (1) of Section 143 of the Act. It was directed that all returns of income validly filed electronically up to Assessment Year 2020-21 with refund claims, which could not be processed under sub-section (1) of the Section 143 of the Act, and which had become time barred, should be processed by 31-1-2024, subject to the conditions/ exceptions specified therein.

2. The matter has been re-considered by the Board in view of pending taxpayer grievances related to the issue of refunds. To mitigate the genuine hardship being faced by the taxpayers on this issue, Board, by virtue of its earlier orders under section 119 of the Act dated 16-10-2023 and 1-12-2023, supra, hereby further extends the time mentioned in the para no. 2 of these orders till 30-4-2024 in respect of returns of income validly filed electronically up to AY 2020-21. All other contents of the said orders u/s 119 of the Act will remain unchanged.

3. This may be brought to the notice of all necessary compliance.

• CBDT notifies income tax return forms for the Assessment Year 2024-25 well in

For AY 2024-25 Income Tax Forms (ITR Forms)-2, 3 and 5 have been notified. In addition to this ITR Form-6 has been notified for AY 2024-25. Earlier, ITR-1 and ITR-4 for the A.Y. 2024-25 were notified vide Notification No. 105 of 2023 dated 22.12.2023. All ITR Forms 1 to 6 have since been notified and will come into effect from 1st April 2024.

• Section 90 of the Income tax Act, 1961- Double Taxation Relief- Agreement between Government of Republic of India and Government of Samoa for exchange of Information with respect of taxes.

Whereas an agreement between the Government of Republic of India and Government of Samoa for exchange of information with respect to taxes, was signed at Apia, Samoa on 12th day of March, 2020, the said Agreement came into force on the 12th day of September, 2023, being the date of the later of the notifications of the completion of the procedures required by the respective laws of the contracting states for entry into force of the said Agreement, in accordance with paragraphs 1 and 2 of Article 12 of the said Agreement,

Paragraph 2 of Article 12 of the said Agreement provides that the Agreement shall have effect forthwith after the date of entry into force.

Now, therefore, in exercise of the powers conferred by sub-section (1) of section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that all the provisions of the said Agreement, as annexed hereto, shall be given effect to in the Union of India

• Scientific Research Institution/Association approved Scientific Research Expenditure Under Section 35(1)(Ii) of the Income Tax Act, 1961.

In exercise of the powers conferred by clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (43 of 1961), read with Rules 5C and 5E of the Income-tax Rules, 1962, the Central Government hereby approves ‘M/s Prayoga, Bengaluru (PAN: AACTP9202D) as ‘Other Institution’ and Panjab University, Chandigarh under the category of ‘University, College or Other Institution’ for ‘Scientific Research’ for the purposes of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961, read with rules 5C and 5E of the Income-tax Rules, 1962.

This Notification shall apply with effect for Assessment Years 2024-25 to 2028-29.

• Order has been passed regarding Remission and Extinguishment of Tax Demand Under Income Tax Act, 1961.

In Budget, there is a proposal to remit and extinguish the following claims to revenue, being tax -demands under which are outstanding as on 31st January, 2024 in respect of taxpayers/ assessee

This is expected to give relief to 10 million taxpayers. However, the total waiver is limited to a maximum of Rs. 1,00,000 per taxpayer (PAN). If the aggregate of all outstanding demands exceeds Rs. 1,00,000 for a taxpayer or entity, the waiver will be limited to eligible demands totalling ₹1,00,000 or less, with the remaining demands still applicable. No refunds can be claimed against the demands being waived off.

Introduction of Consent Based Sharing of Information Furnished by Taxable Person through Notified System (Notification No. 6/2024 Date:22-2-24)

The Central Government, on the recommendations of the Council, hereby notifies: “Public Tech Platform for Frictionless Credit” as the system with which information may be shared by the common portal based on consent under

sub-section (2) of Section 158A of the Central Goods and Services Tax Act, 2017 (12 of 2017).

“Public Tech Platform for Frictionless Credit” means an enterprise-grade open architecture information technology platform, conceptualized by the Reserve

Bank of India as part of its “Statement on Developmental and Regulatory Policies” dated the 10th August, 2023 and developed by its wholly owned subsidiary, Reserve Bank Innovation Hub, for the operations of a large ecosystem of credit, to ensure access of information from various data sources digitally and where the financial service providers and multiple data service providers converge on the platform using standard and protocol driven architecture, open and shared Application Programming Interface (API) framework.

• MCA operationalizes Central Processing Centre (CPC) for Centralized Processing of Corporate Filings

12 forms/applications will be processed at CPC from 16.02.2024; followed by other forms from 01.04.2024 onward. CPC will process applications in time-bound and faceless manner on the lines of Central Registration Centre (CRC) and Centralized Processing for Accelerated Corporate Exit (C-PACE).

• Companies (Registration Offices And Fees) Amendment Rules, 2024 – Insertion Of Rule 10a

The Ministry of Corporate Affairs vide Notification No. G.S.R. 107(E) dated February 15, 2024 notified the Companies (Registration Offices and Fees) Amendment Rules, 2024, effective from February 16, 2024. A new rule, 10A, is added to the Companies (Registration Offices and Fees) Rules, 2014, establishing a Central Processing Center. This Center, under section 396 of the Companies Act, 2013, is tasked with examining all applications, e-Forms, or documents for approval or registration by the Registrar.

The Registrar at the Central Processing Center must make decisions within 30 days of filing, excluding cases requiring approval from higher authorities. This rule grants the Central Processing Center jurisdiction over various filings, including resolutions, share capital alterations, name change applications, and conversions of company types.

Multiple filings at once will be handled collectively by the Center, ensuring uniformity in processing. However, the rule clarifies that it does not grant the Center authority under section 399 of the Companies Act, leaving the Registrar with territorial jurisdiction to exercise those powers. This amendment aims to streamline the registration process and centralize decision-making for specified filings across India.

• Relaxation of additional fees and extension of last date of filing of form no. LLP BEN-2 and LLP Form no. 4D under Limited Liability Partnership Act, 2008

LLPs may file Form No. LLP BEN-2 and LLP Form No.4D without paying any additional fees up to 15.05.2024.

The two forms shall be made available in version -3 for the filing purpose w.e.f 15.04.2024

• Action against Paytm Payments Bank Ltd. under section 35A of the Banking Regulation Act, 1949

The Reserve Bank of India, in exercise of its powers under Section 35A of the Banking Regulation Act, 1949, had put certain business restrictions on Paytm Payments Bank Ltd (PPBL or the bank), vide Press Releases dated March 11, 2022 and January 31, 2024. Keeping in view the interest of customers (including merchants) of PPBL who may require a little more time to make alternative arrangements and the larger public interest, the Reserve Bank of India under section 35A of the Banking Regulation Act, 1949 in partial modification of the earlier Directions dated January 31, 2024 has issued certain directions.

• Insolvency and Bankruptcy Board of India amends The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process fr Corporate Persons) Regulations, 2016

The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2024 (Amendment Regulations) on 15th February, 2024 to streamline the corporate insolvency resolution process.

• Enhancing Transparency and Stakeholder Engagement in Liquidation Process

Circulation of progress reports to stakeholders is hereby directed that the liquidator shall also share the progress reports with the members of the Stakeholders’ Consultation Committee (SCC) after receiving a confidential undertaking.

Preparation of preliminary report

It is hereby directed that the liquidator shall seek suggestions/observations of the members of the SCC while preparing the Preliminary Report under regulation 13 and finalise the Preliminary Report after considering such suggestions/observations, and after that, submit it to the AA, Board and members of SCC.

Sharing of the final report, Form H, and process closure/dissolution order with IBBI

It is hereby directed that the liquidator shall submit a copy of Form H along with the final report filed before the Adjudicating Authority as per Regulation 45, and the order for process.

• SEBI has issued an advisory against Fraudulent Trading Schemes claiming to be offered to Indian residents by FPI’s.

SEBI has cautioned investors of some fraudulent entities that were offering resident Indian investors trading opportunities that would be on a par with foreign funds. This is not possible under current rules and investors should be careful of such offers, as fraudsters were enticing victims through online trading courses, seminars, and mentorship programs in the stock market through messaging platforms like WhatsApp and Telegram, as well as live broadcasts. These fraudsters are “Posing as employees or affiliates of Sebi-registered FPIs, they coax individuals into downloading applications that purportedly allow them to purchase shares, subscribe to IPOs, and enjoy ‘institutional account benefits’, all without the need for an official trading or demat account. There is no provision for an ‘institutional account’ in trading, and direct access to the equities market requires investors to have a trading and demat account with a Sebi-registered broker/trading member and DP respectively. Sebi has not granted any relaxations to FPIs regarding securities market investments by Indian investors.” Sebi urged investors to exercise caution and to steer clear of any social media messages, WhatsApp groups, Telegram channels or apps claiming to facilitate stock market access through FPIs or FIIs registered with it.

• Securities and Exchange Board of India (Employees’ Service) (Amendment) Regulations, 2024 – Amendment in Regulation 6 And Schedule

Securities and Exchange Board of India (Employees’ Service) (Amendment) Regulations, 2023 modifies the Securities and Exchange Board of India (Employees’ Service) Regulations, 2001. In the Schedule of the 2001 regulations, in the Table, column 3, there is an insertion of additional qualification requirements for officers in the Legal Stream in Grade ‘A.’ The new requirement specifies that, in addition to the qualifications already specified for the Legal Stream, two years of post-qualification experience as an Advocate (including as an associate in an Advocate’s or Solicitor’s Office or Law Firm) after being enrolled under the Advocates Act, 1961, is a desirable qualification.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for   the period till 28.02.2024

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